ORDER
S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Collector of Central Excise, Madras, dated 7-4-1986 confiscating gold ornaments weighing 2013 gms. valued at Rs. 3,93,000 under Section 71(1) and releasing the same on payment of a fine of Rs. 1,00,000 under Section 73, besides a penalty of Rs. 40,000 under Section 74 of the Gold (Control) Act, 1968 (hereinafter referred to as the ‘Act’).
2. On 13-2-1985, the officers of the Central Excise Department visited the residence of the appellant alongwith the officials of the Income-tax Department and found the appellant in possession of 6012.200 gms. of gold ornaments of 22 ct. purity. Since the appellant was found in possession of gold ornaments in excess of 4000 gms. in respect of which he had not filed any declaration in terms of Section 16 of the Act, the authorities effected seizure of 2013 gms. under mahazar as per law. The appellant gave a statement before the authorities that during 1975 he had given a declaration for about 3 Kgs. of gold ornaments under the provisions of the Wealth-tax Act and that he received gold ornaments by way of presentation during his son’s marriage and also through daughter-in-law and as the Kartha of the family he had not declared the excess gold ornaments which were in his custody and control. It is in these circumstances, after further investigations, proceedings were instituted against the appellant, which ultimately culminated in the present impugned order now appealed against.
3. Shri Ramachandran, the learned Counsel for the appellant, submits that in terms of Section 16(5) of the Act a family is entitled to possess 4000 gms. of ornaments without making any declaration and the word “family” itself has been given a special statutory definition under Section 16(6) of the Act, according to which a family shall be deemed to consist of the husband, wife and one or more minor children or any two or more of them but shall not be deemed to include any other person. It was contended that the appellant along with his wife and minor children would constitute a separate family, which would entitle him under law to possess 4000 gms. of ornaments. It was further urged that the appellant has a major son, Shri Venkatachalam, who is also married and living in the same house, besides two married daughters, who are also living with their husbands. The learned Counsel also submitted that the appellant’s mother-in-law, Smt. Podvayee Ammal, who is the owner of the house, is also residing in the same house. Therefore, the appellant’s major son, who is married and who is living with his wife, would constitute a family within the meaning of Section 16(6) of the Act and that unit would be entitled to possession of 4000 gms. and, therefore, the question of the appellant making any declaration does not arise at all. The learned Counsel also placed reliance on the ratio of the ruling in the case of S. Champalal v. Collector of Central Excise, Bangalore [reported in 1987 (28) ELT 159] of this Tribunal to which one of us has been a party. The learned Counsel further submitted that the reasoning of the adjudicating authority in para 10, Sub-clause (2) of the impugned order is incorrect on facts and in law. It was urged that the appellant had in the reply to the show cause notice clearly mentioned that the ornaments under seizure did not belong exclusively to the appellant and belonged to the other members of the family viz. mother-in-law and daughters and son and the finding of the adjudicating authority that the appellant was in possession of excess ornaments without declaration is wrong and contrary to the facts set out in the reply to the show cause notice.
4. Shri Bhatia, the learned Senior Departmental Representative, contended that in the mahazar it is mentioned that the ornaments in question were in the possession and custody of the appellant. The appellant also in his statement immediately after seizure has stated that the family had a total quantity of 6012.200 gms. of gold ornaments and that non-declaration by the family of ornaments in excess of 4 Kgs. is an offence under the Act. The learned Senior Departmental Representative, therefore, contended that even assuming for the purpose of argument that the other members of the family of the appellant had their own share of the ornaments, even temporary custody or possession of the ornaments of the family with the appellant would oblige him under law to make a declaration on pain of confiscation of the ornaments in breach thereof. No doubt, the learned Senior Departmental Representative submitted that non-declaration in such circumstances could be a technical one.
5. We have carefully considered the submissions made before us. We would like to set out certain facts, which are not disputed or disputable. The fact that the appellant is living with his wife, mother-in-law, 2 married daughters and a major son, who is married, is not disputed before us. Under the provisions of the Act, as rightly pointed out by the learned Counsel for the appellant, the term “family” has been given a special statutory definition under Section 16(6) of the Act as consisting of –
(i) the husband, wife and one or more minor children, or (ii) any two or more of them.
In terms of Section 16(5), a family would be entitled to hold ornaments upto 4000 gms. The appellant, who was living with his wife, would constitute a family comprising himself, his wife and minor children. This unit, which would come within the mischief of definition of the word “family” under Section 16(6) of the Act would be entitled to possess 4000 gms. of ornaments in terms of Section 16(5) of the Act. Section 16(6) is specific that family “shall not be deemed to include any other person” other than the persons mentioned in the definition. In other words, the section is very specific that excepting the husband and wife and one or more minor children, no other members in the family could be deemed to be members of the family within the meaning of Section 16(6) of the Act. Therefore, the appellant’s major son and his wife, who are living in the same house along with the appellant, would constitute by themselves a separate family within the meaning of Section 16(6) of the Act and be entitled to possession of ornaments upto 4000 gms. without any statutory obligation under the Act to make a declaration thereof. We would also like to take note of the fact that even in the statement of the appellant it is clearly mentioned that the appellant’s major son Shri Venkatachalam got married in September, 1984 and that the daughter-in-law also was possessed of ornaments. It is also relevant to point out in this context that the two married daughters of the appellant, who are not members of the appellant’s family within the meaning of the term “family” as defined in the Act under Section 16(6) were also residing with their respective husbands in the same house. Merely because the appellant happens to be the Kartha of Hindu undivided family comprising the various other members of the family, who by themselves would constitute different units of family within the meaning of Section 16(6) of the Act, as indicated above, the appellant cannot be fastened with any statutory obligation to make a declaration of the ornaments belonging to various other families. We are not inclined to countenance the submission of the learned Senior Departmental Representative, that even if the appellant were to hold temporary possession of the ornaments of other families, he would have to make a declaration as per law. In our opinion to adopt such a strict interpretation of the section would tantamount to putting it in a straight jacket as it were, rendering the very provision of the Act totally unworkable. If we can illustrate this point, if the major son of the appellant living with his wife constituting a separate family in terms of Section 16(6) of the Act were to temporarily entrust his family ornaments for safe custody with the father viz. the appellant even for one day or less than that, the father would have to make a declaration, if such a rigid consideration of the section were to be adopted. We have to take into consideration the spirit behind the section enabling people in possession of ornaments in excess of 2000 or 4000 gms. as the case may be to make a declaration. In the present case the observations of the learned Collector under the impugned order in para 10(2) of the order that the appellant had not mentioned about the share of the mother-in-law or his daughters in the ornaments under seizure is not factually correct. We have gone through the reply to show cause notice wherein details have been given about the ownership and possession of the other members of the family in regard to the ornaments in question. Presumably, this factual error may have led the adjudication authority into thinking that the entire ornaments belonged to the appellant. We would also like to advert to the fact that the initial seizures of the ornaments were made by the Income-tax Department on 29-1-1985 and it is contended before us by the appellant that the seizure of the entire ornaments was not from one particular place but was admittedly from different places. Therefore, when various members are living in the same house and ornaments are recovered from various parts of the house, it would not be fair to conclude that the appellant alone has exclusive custody or possession or the ownership of the ornaments so as to fasten on him an obligation under law to make a declaration thereof. Even in the statement given by the appellant on 13-2-1985 immediately on seizure the appellant had stated that the ornaments belonged to the family and that his son Shri Venkatachalam got married on 9-9-1984 and got by way of gifts, presents gold ornaments and daughter-in-law also brought gold ornaments. Therefore, on consideration of the entire facts on record we are inclined to hold that there is no evidence to warrant a conclusion that the appellant was in possession or custody or control or ownership of ornaments in excess of the statutory quantity of 4000 gms. In this view of the matter, following the ratio of the Tribunal in the ruling referred to supra and considering all the relevant facts set out above, we set aside the impugned order appealed against and allow the appeal.