ORDER
K. Gopal Hegde, Member (J)
1. This appeal arises out of and Is directed against the Order-in-Appeal bearingNo. S/49-212/87 GC (BMY) dated 13.11.87 passed by the Collector of Customs (Appeals) Bombay.
2. The undisputed facts are that on 26-8-1985 the appellant made an application for a gold dealer’s licence mentioning two grounds, namely that he was working with M/s. Pushpak Jewellers, Bombay, from 1973 to 1982, his name had been mentioned in GS-6 form of M/s. Pushpam Jewellers for the said period and which are available in the office of the Deputy Collector. Secondly, that he got a Goldsmith Certificate No. BHJ/GS/44/83 and he has been maintaining the accounts In the form of GS-13 of the business conducted by him. in the Annexure to the application the applicant furnished the turnover as under:
Period Weight
1-1-1984 to 31-12-1984 2090.050gms.
1-1-1985 to 15-8-1985 2560.900 gms.
3. The Superintendent issued a show cause notice dated 25-9-1986 alleging that the appellant herein does not fulfil the condition as laid down in Proviso (b) to Rule 2 (f) of the Gold (Control) (Licensing of Dealers) Rules, 1969 (for short the Rules”) inasmuch as he filed that GS-6 application on 26-8-1985 on the basis of the turnover for the calendar year 1984-85 upto 15-8-1985 thereby failed to fulfil the condition for filing the application in the form GS-6 as sttipulated in the Proviso (b) to Rule 2(f) of the Rules i.e. before the completion of the period for the second calendar year. The appellant was called upon to show cause as to why his application should not be rejected on the ground mentioned in the show cause notice. The appellant sent his reply dated 30-9-1986. While contending that he fulfils the condition of the Proviso (b) to Rule 2(f) of the Rules he also urged that the Licensing Authority before rejecting the application should have regard to all the clauses of Rule 2. He urged that the charge of non-fulfilment of the condition stipulated under the Proviso (b) to Section 2(f) are unwarranted, bad in law, irrelevant, motivated.
4. The Deputy Collector of Customs (Preventive) Gold Control, who held the enquiry rejected the application under Section 27 (6) (a) of the Gold (Control) Act. The rejection was mainly on the ground that the entries found in the GS-13 are either bogus or smugged. He has not gone into the contention as to the applicant’s past experience. On appeal the Collector (Appeals) passed a somewhat curious order which reads:
“I have considered the facts of the case and find that the lower authority has definitely entered two different figures against the column ‘turnover’ in two different orders for the year 1983 and if the order of the lower authority is accepted in the case quoted by the appellant, then there has been increased in the demand for gold ornaments as there is increase in trade and turnover. On the basis of the findings recorded, it is clear that the appellant has experience in dealing in gold ornaments as well as making and manufacturing of gold ornaments. The ratio of CEGAT (North Regional Bench) Judgment contained in Order No. A/169/87-NRB dated 183-1987 is aptly applicable in this case. But the precise point is as to whether the appellant has the requisite experience, the appellant have not replied to the different discrepancies raised by the lower authority in the order with regard to the records maintained by the appellant. Under these circumstances, I agree with the lower authority that the appellant does not have the requisite experience. The appeal is rejected.”
5. During the hearing of this appeal Shri Gujral submitted that there was total non-application of the mind both on the part of the Deputy Collector and Collector (Appeals). He submitted that there was no allegation in the show cause notice that the entries in GS13 register are either bogus or smugged. In the said circumstances, the findings arrived at both by the authorities below are beyond the scope of enquiries, as no such allegation has been made in the show cause notice. Shri Gujral submitted that the Collector (Appeals) at one place had accepted the appellant’s contention that he had experience in dealing in gold ornaments as well as making and manufacturing of gold ornaments. The Collector (Appeals) had further observed in his order that the CEGAT judgment referred to in his order aptly applies to the facts of the case. Having held so the Appellate Collector, according to Shri Gujral. ought to have allowed the appeal and ought not to have agreed with the lower authority and that too the finding of the lower authority was irrelevant in considering the application. Shri Gujral submitted that mere experience coupled with the subsequent goldsmith certificate would be sufficient to grant the licence. In any case the Licensing Authority ought to have regard to all the Clauses of Rule 2 of the Rules and not merely to one of the Clause of Rule 2. In support of his contention Shri Gujral relied on several judgments. He particularly relied on the Allahabad High Court decision reported in Section II page 375 Cen-Cus Manual 1984 Edition wherein the Allahabad High Court had held that the salesman has a requisite experience of dealing in gold. Shri Gujral also placed reliance on the various decisions of this Bench particularly with the one reported in 1988 (17) ECR page 389 CEGAT (WRB) Shri Shantilal G. Jain v. Collector of Customs (Preventive) Bombay. He referred to the finding of this Bench which was to the effect that : “In processing an application for the issue of a gold dealer’s licence all the provisions of Rule 2 of the Gold Control (Licensing of Dealers) Rules should be taken into consideration, and in deserving cases the licensing authority has the discretion to issue a licence even if some of the criteria are not fulfilled.” Shri Gujral therefore prayed that the appellant’s appeal may be allowed.
6. Shri Prabhu, appearing for the Collector, supported the orders passed by the authorities below. He submitted that both the authorities have concurred in finding that the GS-13 register has been smugged and bogus entries have been made.
7. We have considered the submissions made on both the side and perused the available records. We have no hesitation in holding that the finding recorded by both the authorities was outside the scope of show cause notice issued to the appellant. No opportunity was recorded to the appellants on the discrepancies relied upon as found in the GS:13 register. Besides the above the original authority has not bothered to consider one of the grounds on which the application for licence was made, namely past experience, in the application itself the period of experience had been specified Further the firm in which the applicant was employed was also mentioned. It was stated in the application that the returns submitted by the appellant were available with the department and the same could be verified. Unfortunately the department did not bother either to verify or to mention in the show cause notice that licence cannot be issued on the ground that the previous experience has not been established.
7A. Rule 2 of the Rules sets out the matters to which regard shall be had before issuing the licence. It requires the licensing authority to have regard to the matters enumerated in Clause (a) to (f) of the Rule 2. Clause (b) reads: the experience of the applicant with regard to the dealing in, or making, manufacturing, preparing, repairing or polishing of ornaments;” This Rule nowhere lays down the period of experience. The authorities below have totally ignored this clause of Rule 2.
8. There may be a justification for rejecting the application on the ground that the applicant does not qualify for proviso (b) to Clause (f) of Rule 2. As a matter of fact, the show cause notice issued was to that effect. The application for licence was made before the expiry of two years after the goldsmith” certificate was issued. In the said circumstances, the applicant would not qualify for a licence under the said clause. Since the application was made on two grounds, the department was duty bound to consider both the grounds.
9. As stated earlier both the authorities below did not consider the first ground, namely the experience alleged by the applicant. Therefore, the orders passed by the authorities below are required to be set aside and the matter is required to be remanded for fresh consideration.
10. Accordingly while allowing this appeal and setting aside the orders passed by the authorities below, we remand the mattter to the Deputy Collector to consider the application afresh in the light of the observations made in this order as well as the various decisions governing the issue of granting of licence.
