ORDER
Shri S.S. Sekhon
1. One I. Ismail Kutty the appellant (referred herein as A-1)owner of jewellery shop by the name of ABHARANAMAL in Kayankulam Municipality area of Kerala was holder of Dealers Licence No 34/C/80 granted under the Gold Control Act and was maintaining the records prescribed there under.
2. On 30th October 1987, officers of Preventive Department verified the stocks of Gold ornaments and the registers maintained by him.They found the stock entries to be made upto i.e. 30.10.87 and the stocks of new ornaments recorded in balance was 2760.360 gms Gross in 568 Nos the net weight being 2707.550 gms. The stocks of old gold ornaments in balance shown was NIL. On questioning, they were told by A-1, that he did not have any Gold or Gold ornaments kept unlawfully without accounting for the same.
3. The officers then informed A-1 and the witnesses, that they were going to search the premises, as they had bonafide reasons to believed, that Gold and Gold Ornaments were kept unauthorisedly in the shop without accounting for the same and in violation of the Gold(control) Act 1968 and Customs Act 1962.
4. Thereafter, the officers searched and found new gold ornaments in the showcase and found them to be 568 numbers weighing 2760.350 gms as per the register stocks. From the safe inside the shop and from a `Secret Chamber’ on the top of the ceiling above the door between the room where the safe was kept and the showroom, gold and gold ornaments were found.The Gold Biscuit weighting 100 gms found was with foreign markings of 999.9 purity.These ornaments were found to be totally weighing 8083.3 gms and the gold biscuit weighing 100 gms and the ornaments weighing 8083.3 were not accounted in the Registers maintained under the Gold (Control) Act.These ornaments were found to be of 22 carat’ and the gold (100 gms) 24 carat purity by one Shri Damodara Achari (certified Gold-Smith having certificate No 4/79) and were accepted by A-1 to be so.There gold ornaments and he Gold Biscuits were seized under the bonafide belief they were liable for seizure under the Gold Control Act 1968 and the Customs Act 1962.
5. Statements were recorded and enquiries made and a SCN was issued on 17.11.87 to A-1.The statements were retracted in the meantime by letters to the authorities alleging them to be obtained by force and coercion.The Gold Ornaments (8083.3 gms) found unaccounted were claimed by letter dt 26.11.87 by appellant Smt Rasheed Bevi wife of A-1 (hereinafter referred to as A-2) as having been borrowed by her, from her friends and relatives under a scheme, got cleaned,polished and were to be kept in her husband’s shop to increase his business, fearing competition from another shop likely to come up in viscinity of the husband’s shop. It was stated in the claim, that this jewellery was kept at a separate building, pending extension of the business of her husband and were infact seized from the said separate building, belonging to her and not the date of the search of the shop, from her, at her house and sized the same showing it as a recovery from the shop in her absence.
6. The then Collector adjudicated the matter, ex-parte and ordered the confiscation.The Tribunal in appeal confirmed the order of confiscation of gold ornaments but gave a redemption fine of Rs10 lakhs and penalty of Rs 50,000/-. The reference application filed by A-1 was rejected.The Honble High Court of Kerala disposed off OP No 15760/2 filed by A-1, vide order dt 13.2.96 with a direction to Commissioner to grant hearing and complete the Adjudication proceedings before 31.7.1996. The Commissioner vide his order dt 30.7.96. after hearing a-1 and A-2, cross-examining A-2 and other claimants of Gold Ornaments ordered the confiscation of 100 gms Gold Biscuits under Section 111(d) of the Custom,s Act and under Section 71 for the Gold Control Act.The Gold ornaments weighing 8083.3 gms, were ordered to be confiscated under Section 71 of Gold (Control)Act 1968 and an option of Redemption on payment of fine of Rs 5 lakhs was given.A penalty of Rs 1,00,000/- under Section 74 of the Gold (Control)Act and Rs 15,000/- under Section 112(b) of the Customs Act 1962 were levied on A-1.Present Appeals are against this order.
7. We have heard for the appellants Shri V.Ramachandran, Advocate led us through the back-ground of the case and requested for reduction of the redemption fine and penalties imposed. Smit Radha Arun, DR on the other had rebutted that there was no case for reduction of the fines and penalties as the offending items were found concealed and unaccounted and the repeal of the Gold (Control) Act 1968 has been considered by the learned Adjudicator and no new grounds have been adduced by the learned Advocate to merit a reduction.We have considered the submissions and the material and after considering the same find—
(a) The learned Commissioners has not only considered the alleged retractions and the conduct in not making a complaint to the Magistrate on the earliest opportunity i.e. 1.10.87 and has rejected the retraction.Nothing new has been brought before us to conclude otherwise.
(b) We have carefully perused the Mazahar and the Commissioner’s findings thereon.The Commissioner in Para-7 of his order has considered the allegations of the Mazahar not-recording the correct facts of recovery and found that
“…..Though they have contested the Mahazar, no attempt has been made to disprove the same, nor did they ask for cross-examination of the mahazar witnesses. This would indicate that their claim regarding the search and seizure from the adjacent building remains un-substantiated.”
No ground of denial of cross-examination or a request of the same levied have been taken by A-1, A-2, in the appeal filed before us.The Mazhar therefore has to be accepted to depict the correct facts. We cannot accept, that the, wife (A-2) would have parted with the keys, on mere demand from the officer, when she knew she has kept valuable property in the building adjacent to the husbands shop and more so when she did not trust her husband with the key of the premises,having said to be kept with her i.e. A-2.We therefore, do not find any substance in the defence being put up that recovered 8082.3 gms of new gold ornaments are polished old ornaments, collected by A-2 under some scheme floated by her and kept separately in her building adjacent to the shop.We find that the Commissioner in paragraphs 8,9,10 of the impugned order has extensively dealt with eh claim of A-2 after questioning A-2 and other and considering the claim, he found the ornaments claimed by A-2 weighing 8022.600 gms while the actual weight of seized ornaments to be 8083.300 gms and this additional ornaments of 60.700 gms was not explained by A-2 as to how the weight of the jewellery collected by A-2 could go up when her records show melting besides the fact of no receipts having been issued or and even the doubts about the name of the alleged scheme in the deposition A-2 before the Commissioner.We find no reasons to disturb this finding of the Commissioner.
(c)Similarly the Commissioner has considered the findings of Income Tax authorities and he has examined the other claimants.We find no infirmity in these findings that the Gold ornaments under seizure were found in the shop premises of A-1 along with the Gold Bar with purity markings as per the Mazahar down and are not part of any scheme floated by A-2.We do not fine the finds of A-2 being a Gold dealer as arrived at in para 13 of the impugned order, as we find no ornaments relating to that dealing to be of A-2 in this case to be under seizure.
(d) We also do not find any reason to believe that some `Rashid’ would come and keep a gold bar 100 gms with foreign markings in the shops as explained by A-1, when he sees a crowd of people inside the shop and officers were making a search within the shop premises.normal reaction of a person having foreign marked gold should have been to run away with such gold,rather than keep it in the premises for the officers to seize it.The defence is made up and is correctly rejected by the Commissioner.In absence of challenge to the `mazahar’ recovery and possession of gold from the safe of A-1 is established.
(e) New gold assignments are found to be liable for confiscation under Section 71 of the Gold Control Act 1968.On going through the facts and circumstance although we justify the action of the adjudicating authority in ordering for confiscation, we are of the new view that more lenient view is called for in the fact and circumstances particularly in view of the fact that Gold Control Act 1968 has been repealed.In the view we have taken redemption fine is reduced to Rs 3 lakhs as against Rs lakh.Option is offered to A-1 since claim of A-2 is not accepted for the jewellery under seizure.
(f) The foreign marked gold of 100 gms is liable for confiscation under Section 111(d). the Appellants are not claiming the same.No redemption fine therefore need by offered to them.
(g) We find that penalty of Rs1,00,000/- under Section 74 of the Gold (Control) Act 1968 would be harsh in view of the fact that the Act is repealed. Since the case is only of receipt and non-accountal of Gold ornaments, we would reduce it to a taken amount of Rs 10,000/- only.
(h) Since the confiscation of the 100 gms foreign marked gold is not claimed by A-1 the penalty find under Section 112(a) of Rs.15,000/- on A-1 is reduced to Rs 5,000/-.
(j) The appeals allowed party as above.
(Pronounced and in open court on 16/5/2001