ORDER
M. Santhanam, Member (J)
1. This is an application for referring ‘certain questions of law as arising out of the order of the Tribunal in Appeal No. 1488/83-NRB.
2. The facts of the case are as follows : On 27-8-1982 the licensed premises of the applicants at 1707, Dariba Kalan, Delhi was checked by the Gold Control Preventive Officers. The stocks and accounts of gold and gold ornaments were checked. Both the Partners, S/Shri Daryao Singh Jain and Bahadur Singh Jain, were present. They also produced the statutory records maintained by them under the Gold (Control) Act, 1968. The stock was checked in the presence of two independent witnesses and a quantity of 2386.7.50 gms, of gold ornaments of 12/24 carats purity valued at Rs. 3,74,843.00 was found in excess. They were seized under Section 66 of the Gold (Control) Act on the ground that they were liable for confiscation ‘under Section 71 of the Act. It must be said that on 28-8-1982 the applicants sent a telegram to the Collector of Central Excise, New Delhi stating that the officers forced the applicants to write a statement and that the excess was duly explained as gold ornaments belonging to various customers. A letter was also sent on 28-8-1982 giving the names of goldsmiths and customers. A show cause notice was issued on 1-10-1982 for contravention of the provisions of Sections 8 and 55 of the Gold (Control) Act, 1968 read with Rule 13 of the Gold (Control) (Forms, Fees & Misc. Matter) Rules, 1968. In reply, the applicants contended that the gold belonged to several customers and a part of it was their stock-in-trade. The Collector after adjudication found that in respect of a quantity of 311.750 gms. of ornaments the contention of the applicants that these items belonged to customers were acceptable and ordered release of the same. He found that a quantity of 2075 gms. of ornaments were liable to be confiscated. In this view the affidavits produced by the applicants were unreliable. He found that unusually large quantities of ornaments were indicated having, been received for repairs during the period and it was not so during the corresponding period of 1981 The Collector has observed that the applicants had actually attempted to prove the seized ornaments as belonging to third parties under affidavits filed subsequently and got them entered in the GS-13 Registers of the various goldsmiths. He ordered confiscation of the ornaments, giving the applicants the option of redeeming them on a fine of Rs. 50,000/- in lieu of confiscation. A penalty of Rs. 10,000/- was imposed.
3. In the appeal before the Tribunal, identical contentions were raised. The Tribunal, after consideration of the submissions, found that the affidavits had been produced subsequent to the seizure and there was no reference to the existence of these affidavits even in the show cause notice. The Tribunal also held that the accounts of the certified goldsmiths were also produced after a considerable delay and the time lag of producing the evidence was very vital and affected the evidentiary value. In respect of the affidavits available on record, it was observed that there was no verification by any judicial officer. The disproportionately large quantities shown as given for repairs were considered by the Tribunal. The Tribunal ultimately upheld the confiscation, but reduced the penalty from Rs. 10,000/- to Rs. 5,000/- and the redemption fine was also reduced from Rs. 50,000/- to Rs. 30,000/-.
4. The learned counsel for the applicants submitted that the applicants had filed the copy of the application sent by them to the Collector as also the letter dated 28-8-1982 wherein references have been made to the ornaments as belonging to third parties. He submitted that the Tribunal should have accepted the affidavits of all the customers He relied on the circumstances that the gold ornaments which were in envelopes bearing the names of the customers were ordered to be released. During the adjudication proceedings the panch witnesses were cross-examined and most of the ornaments were found in bags and same names had been written on the envelopes. He stated that the gold dealers had filed the affidavits of their customers. According to him, the following questions of law would arise from the order of the Tribunal and have to be referred to the Hon’ble High Court :-
(i) What is the effect of naming the persons immediately after the seizure by the applicant in his letter dated 28-8-1982 and the evidentiary value, if any of affidavits of these persons produced during the course of adjudication proceedings?
(ii) Whether the Collector and the Tribunal was justified in ignoring the statement of Shri Daryao Singh Jain at page 6 and 7 of the Appeal Paper Book which is in the following terms :-
“The seized ornaments are our stock in trade and belong to customers” and if the Tribunal was not justified in so doing, the legal consequence thereof.
(iii) Whether the Tribunal, without looking into the original affidavits on record of the Collector, was justified in recording a finding on the basis of copies of the affidavits of Shri Devendra Kumar and Vimal Prasad Jain dated 7-4-1983 and 8-4-1983 placed in Appeal Paper Book on record as samples that there is no verification (of affidavits) by any judicial officer and the verification endorsement is signed by the dependent’s themselves and, if the Tribunal was not justified, its legal effect?
(iv) Having regard to the provisions of Section 83(1)(d) of the Gold Control Act, 1968 whether, despite the stage at which the affidavits and photostats of records of Goldsmiths might have been produced by the applicant, a duty was cast on the department to make enquiries from the deponents of affidavits and the goldsmiths and/or to cross-examine the deponents of affidavits, if so, the legal effect of non-making of such enquiries?
(v) Whether the Tribunal was right in not following its own Order No. A-182/85-NRB, for the failure of the departmental authorities to verify the ownership of seized ornaments from the deponents of affidavits?
(vi) Whether on production of affidavits of Customers during the course of adjudication proceedings, the burden of proving the ownership of Gold had shifted on to the department and if so, in the absence of any evidence in this regard controverting the contents of affidavits on record, the Tribunal was justified in recording and/or confirming the ownership of applicant on the presumption contemplated by Section 99 of the Gold (Control) Act?
(vii) The legal effect of deposition of panch witnesses in cross examination that mostly the jewellery was in 15-16 envelopes and Shri Deryao Singh was saying that the excess jewellery belonged to customers on :
(a) the statement of Shri Daryao Singh which is conspicuously silent in this regard, and (b) the order of the Collector releasing only contents of 4 envelopes and the Tribunal's finding that deposition does not bring out whether there was any duress on Shri Daryao Singh in giving that statement?
(viii) If the legal effect of question No. (vii) is that the statement of Shri Daryao Singh was briddled and involuntary, then as to whether the Tribunal was justified in disbelieving the case of the applicant and holding it to be the owner of entire seized quantity which included the ornaments belonging to customers and in recording a finding that the plea of Desh Raj having returned the stock in trade the preceding evening was not convincing?
(ix) Whether the non-receipt of heavy repair work during the preceding period 5-6-1981 to 2-3-1982 relevant for judging the instant seizure effected during the subsequent period and, if not, the legal effect?
(x) Whether the Tribunal was justified in ignoring and not considering the copies of issue voucher, Register of Gold Account and Account of Shri Desh Raj Goldsmith in the karigar bahi and if not, the effect thereof?
5. Smt. Nisha Chathurvedi. the learned SDR stated that the Tribunal has considered all the aspects and no question of law would arise.
6. The main plank of Shri Jain’s contention is that the affidavits of the persons who are the owners of the ornaments had been produced and the adjudicating authorities as also the Tribunal should not have ignored the same. The first question in effect is a matter of the evidentiary value of the affidavits. The second question is also a statement of the Partners stating that the seized ornaments belonged to the customers. The fourth question refers to the duty cast on the department to make enquiries from the deponents of the affidavits and the goldsmiths and to cross-examine them. The sixth, seventh, eighth and tenth questions also refer to the identical issue of the ornaments belonging to the customers. The ninth question refers to the inference drawn on the basis of evidence.
7. The third question is in respect of the affidavits filed before the Tribunal which did not contain the verification by any judicial officer. This will not be strictly a question of law as the Tribunal has acted upon the materials placed before it by the applicants. The fifth question will also not arise as it refers to the prior order of the Tribunal and the same has been considered in paragraph 4 of the order.
8. On a careful consideration of the material we are of the view that the following questions of law would arise :
(i) Whether, under the facts and circumstances of the case, the Tribunal was right in disregarding the affidavits and photostat records of goldsmiths in arriving at a finding that the applicants were the owners of the seized ornaments?
(ii) Whether, under the facts and circumstances of the case, the Tribunal was justified in confirming the ownership of the ornaments on the applicants under Section 99 of the Gold (Control) Act, 1968?
(iii) Whether the burden of proving the ownership of gold had shifted on to the department on the production of the affidavits of customers at a late stage and during the course of adjudication proceedings?
The above questions of law, as arising out of the Order No. A-284/85-NRB dated 12th September, 1985 of this Tribunal, are submitted to the Hon’ble High Court, New Delhi for their considered opinion.