ORDER
S. Kalyanam, Member (J)
1. The above appeals arise out of the common order of the Collector of Customs & Central Excise, Hyderabad, dated 1-7-1987.
2. Under the impugned order the adjudicating authority has absolutely confiscated 12.350 gms. of primary gold of 18 ct. purity valued at Rs. 2,100 under Section 71, confiscated 340 pieces of gold ornaments weighing 1097.000 gms. of 22 ct. purity valued at Rs. 2,08,430/- and permitted redemption of the same on payment of a fine of Rs. 1,50,000 under Section 73, imposed a further fine of Rs. 2,000 in lieu of confiscation of the ornaments of weighing 23.300 gms. of 22 ct. purity, besides a penalty of Rs. 50,000 on appellant Ratan Jewellers and Rs. 5,000 on appellant Kiran Kumar under Section 74 of the Gold (Control) Act, 1968, the ‘Act’ for short.
3. Appellant Ratan Jewellers are licensed Gold Dealers at Nellore. Appellant Hirachand is the Power of Attorney of Ratan Jewellers looking after the business of the firm. Appellant Kiran Kumar is the son of appellant Hirachand.
4. On 16-2-1986 the Superintendent of Central Excise (Preventive), Nellore, alongwith his officers intercepted appellant Kiran Kumar at Nellore bus stand and recovered from his possession 14 paper packets containing 340 pieces of new gold ornaments of different description totally weighing 1097.000 gms. Kiran Kumar was also found in possession of 2 vouchers bearing Nos. 99 and 100 issued in the name of Jashko Fashion Jewellers, Kottayam. Since the ornaments were in trade quantities and the vouchers found in the possession of Kiran Kumar contained many irregularities and also some over-writing, the authorities on a reasonable belief that the ornaments in question were being taken for purposes of sale in contravention of the provisions of the Act effected seizure of the same under a mahazar as per law. As a follow up action, the authorities verified the stocks and accounts at M/s. Ratan Jewellers, Nellore, and found the same to be correct. The authorities visited the residential premises of appellant Hirachand at Kandapala Street, Nellore, and recovered from the house the following gold and ornaments:
Sl. Description No. of pieces Weight Purity Ct. Value Rs.
No. Gms.
1. Primary gold 4 12.350 18 2,100/-
2. Ear studs with stones 21 18.100 22 3,439/-
3. Ear studs without 6 5.200 22 900/-
stones
Total 31 35.650 6,527/-
Since Hirachand was not able to satisfactorily account for the primary gold and ornaments, the authorities effected seizure of the same under a mahazar as per law. Appellant Hirachand also gave a statement before the authorities on the same day that the primary gold and ornaments seized from his house formed part of the stock in trade of appellant Ratan Jewellers and had not been accounted for in the statutory accounts. In these circumstances, after further investigations, proceedings were instituted against the appellants, which eventually culminated in the present impugned order now appealed against.
5. Shri Vasudevan, the learned Consultant for the appellants, submitted that the charges against appellant Ratan Jewellers are under Section 27(1), 27(7)(b), 55(1), 55(2) and Section 36 read with Rule 13 of the Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968, the ‘Rules’ for short. The learned Consultant at the outset submitted that in regard to the charge of contravention in respect of the primary gold and ornaments seized from the residential premises of appellant Hirachand, the appeal is not contested on merits. The learned Consultant further submitted that the charge under Section 36 read with Rule 13 of the Rules is also not contested on merits and submitted that the breach is only technical, since most of the particulars, which the voucher in terms of Rule 13 of the Rules should contain, are incorporated. The learned Consultant urged that the charges under Sections 27(1) and 27(7)(b) are not made out by the evidence on record and assailed the reasoning of the adjudicating authority in regard to the same.
6. It was urged that 1083.000 gms. of ornaments under seizure were on the basis of an order by Jashko Fashion Jewellers, Kottayam, despatched to Kottayam through Kiran Kumar under voucher No. 100 dated 16-2-1986. The balance quantity of 14.000 gms. was sent to the same Jashko Fashion Jewellers, Kottayam, under voucher No. 99 dated 16-2-1986. It was contended that Kiran Kumar was also carrying a credit bill for the total quantity of gold ornaments for a total sum of Rs. 2,11,999 and the bill is also dated 16-2- 1986. The learned Consultant submitted that it is open to Ratan Jewellers to effect sales in their premises to another Dealer on the basis of purchase order and in the present case in para 6 of the show cause notice dated 28-7-1986 it is admitted by the Department that on verification of the records at Jashko Fashion Jewellers, Kottayam, on 11-3-1986 Jose, proprietor of Jashko Fashion Jewellers, stated that an order dated 10-2-1986 was placed with appellant M/s. Ratan Jewellers, Nellore, for one kg. of new gold ornaments and in support of his version produced a photostat copy of his letter dated 10-2-1986. The learned Consultant submitted that this purchase order, which was verified by the authorities, must be accepted and acted upon in which case the charge under Section 27(7)(b) is not sustainable on the facts. The learned Consultant further submitted that absolute confiscation of 12.350 gms. of primary gold is also not correct, since the purity of the primary gold was only 18 ct. In regard to the quantum of fine in lieu of confiscation of 1097.000 gms. of ornaments plus 23.300 gms. of ornaments, it was urged that the quantum of fine is very harsh and excessive. The learned Consultant further submitted that penalty of Rs. 50,000 on appellant Ratan Jewellers is also very excessive and high and warrants reduction in the facts and circumstances of this case.
7. Heard Shri Bhatia, the learned Senior D.R.
8. We have carefully considered the submissions made before us. So far as the charges under Sections 55(1), 55(2) and 36 read with Rule 13 of the Rules are concerned, the appeal is not contested on merits. The important question that arises for our consideration in the context of the appeal is whether the evidence on record bears out and brings home the charges under Sections 27(1) and 27(7)(b) of the Act against appellant Ratan Jewellers in respect of the total quantity of 1097.000 gms. referred to above. Section 27(1) of the Act deals with a dealer transacting business without a licence and it is not the case of the Department here that Ratan Jewellers was dealing in gold without a licence. The learned Senior D.R. also fairly conceded this position and submits it is a mistake. We, therefore, hold that the charge under Section 27(1) is not made out and is not applicable. We shall now consider the charge under Section 27(7)(b) of the Act. Section 27(7)(b) enjoins on a licensed dealer not to carry on business as such dealer in any premises other than the premises specified in his licence. In the present case the plea of the learned Consultant is that the ornaments in question were being taken to Kottayam through Kiran Kumar only on the basis of the purchase order placed by Jashko Fashion Jewellers, Kottayam. The question that arises for our consideration, therefore, is whether there is evidence on record to indicate and prove that Jashko Fashion Jewellers really placed orders for the ornaments in question and whether the ornaments in question were sold on credit basis and despatched to Kottayam pursuant to such purchase order. We have gone through the purchase order of Jashko Fashion Jewellers dated 10-2-1986. It reads as follows: –
“Please send to us Necklaces, Bangles, Studs, Rings and other light weight ornaments with and without stones,… approximately weighing 1 kg through your man Omprakash explained to him with Bill 2 voucher. Ornaments which are not acceptable to me will be returned to you with the voucher.”
It is indeed strange that a licensed Gold Dealer at Kottayam would not even specify the nature of ornaments, the design, the purity and other relevant particulars in the order he has placed with the appellant Ratan Jewellers. Likewise, in the voucher issued in support of the alleged sale of 1097.000 gms. of ornaments covered by voucher Nos. 99 & 100, we do not find any description at all about the nature of the ornaments, the nett weight, description, etc. Voucher No. 100 merely states gold ornaments 339 pieces and weight 1083. Likewise, voucher No. 99 merely states gold ornaments, “weight 14”. Therefore, in our view the purchase order has absolutely nothing to do with the ornaments under seizure. We would also like to note that the credit bill dated 16-2-1986 purported to have been issued by appellant Ratan Jewellers for the sale of 1083.000 gms. or ornaments in question does not contain the order No. of Jashko Fashion Jewellers. The admitted fact remains that the purchase order of Jashko Fashion Jewellers was not produced by the appellant at the time when the authorities visited the business premises of Ratan Jewellers and the residential premises of the Power of Attorney Hirachand. To a specific query in this regard the learned Consultant was not able to offer any satisfactory explanation except that production of the purchase order is not relevant under the provisions of the Act. So far as the vouchers are concerned, as rightly pointed out by the learned Collector under the impugned order, the original of voucher No. 100 is different from that of its duplicate and this fact has also been proved and established by the report of the Government Examiner for Questioned Documents, Hyderabad. Hirachand also has stated before the authorities that he was not having any written purchase order and was sending the gold ornaments weighing 1097.000 gms. through his son Kiran Kumar to the dealer at Kottayam.
9. The Supreme Court in analysing the scope of Section 27(7)(b) of the Act has, in the case of Manik Chand Paul and 35 Others v. Union of India and 3 Others, held that Section 27(7)(b), which confines a licensed dealer to the premises specified in his licence, is regulatory in character and does not violate any of his rights under the Constitution. [1984 (18) E.L.T. 185 (S.C.)]. In interpreting the scope of Section 27(7)(b) of the Act, the Himachal Pradesh High Court in the case of M/s. Girdhari Lal, the Andhra Pradesh High Court in the case of M/s. Laxmi Jewellery, the Punjab and Haryana High Court in the case of Gian Chand Kapur, have clearly held that a licensed dealer shall not carry on business as such dealer in any premises other than the premises specified in his licence. Therefore, in the present case, in our view, the alleged purchase order relied upon by the appellant Ratan Jewellers is not relatable to the ornaments in question. The purchase order is very vague and does not give any particulars at all. The purchase order admittedly was not produced before the authorities by appellant Ratan Jewellers. The vouchers and the credit bill relied upon by the appellant Ratan Jewellers in regard to the ornaments in question contain various irregularities mentioned above and are not acceptable. We, therefore, on consideration of the evidence on record hold that the charge of contravention under Section 27(7)(b) of the Act, has been made out against appellant Ratan Jewellers.
10. In regard to the quantity of primary gold and ornaments recovered from the residential premises of appellant Hirachand, who is the Power of Attorney of Ratan Jewellers, the appeal is not contested on merits and the charges of contravention are conceded. Therefore, on consideration of the entire evidence on record we hold that the charges of contravention against Ratan Jewellers except the one under Section 27(1) of the Act have been proved and established. We find that the ornaments totally weighing 1097.000 gms. are of 22 ct. purity as evidenced by the annexure to the mahazar dated 16- 2-1986 and the value of the same has been put at Rs. 2,08,430 by the learned Collector under the impugned order. Keeping the purity and the value of the ornaments in mind and also the nature of the contraventions alleged against the appellant Ratan Jewellers, we modify the quantum of fine and reduce the same from Rs. 1,50,000 to Rs. 75,000 (Rs. Seventy five thousand).
11. The primary gold and gold ornaments totally weighing 35.650 gms. recovered from the residential premises of appellant Hirachand and which we have held to belong to Ratan Jewellers forming part of the stock in trade, are valued at Rs. 6,527/in the impugned order. Keeping in mind that the purity of the primary gold is only 18 ct. and that of the ornaments is only 22 ct., we modify the order of absolute confiscation of the primary gold of 12.350 gms. and permit redemption of the same by the appellant Ratan Jewellers. Taking the primary gold and ornaments totally weighing 35.650 gms. and valued at Rs. 6,527/- into consideration, we modify the impugned order and permit redemption of the same by appellant Ratan Jewellers on payment of a fine of Rs. 2,500 (Rs. Two thousand and five hundred). Appellant Ratan Jewellers is directed to exercise the option of redeeming the primary gold and ornaments within two months from the date of receipt of this order and shall within a month therefrom convert the primary gold of 12.350 gms. into ornaments as per law and report compliance to the adjudicating authority, failing which the same will be liable for absolute confiscation. In the circumstances of the case we reduce the penalty on appellant Ratan Jewellers from Rs. 50,000 to Rs. 10,000 (Rs. Ten thousand).
12. We do not find any specific evidence to sustain any charge against appellant Kiran Kumar. Even according to the Department Kiran Kumar was merely carrying gold ornaments and the vouchers handed over to him by his father and he cannot be called even an abettor to the commission of any offence in the facts and circumstances of this case. No charge of contravention under any of the provisions of the Act has been clearly set out as against him even in the show cause notice. We, therefore, give him the benefit of doubt and exonerate him and allow his appeal G/357/87.
13. The appeal of appellant Hirachand in G/358/87 has been made by him only as a claimant in regard to the primary gold and ornaments seized from his residential premises. We have already held that the primary gold and ornaments seized from the residential premises of Hirachand, who is the Power of Attorney of Ratan Jewellers, belonged to the stock in trade of appellant Ratan Jewellers. We, therefore, negative the claim of appellant Hirachand and dismiss his appeal.
14. The appeals have been accordingly disposed of.