1984 (6) TMI 237 - AT - Customs

Summary

Issues Involved:
1. Legality of the seizure of gold and gold ornaments.
2. Accounting discrepancies in the weight of gold ornaments.
3. Confiscation of excess primary gold.
4. Imposition of penalties on the firm and its partners.

Detailed Analysis:

1. Legality of the Seizure of Gold and Gold Ornaments:
The appellants argued that the seizure was illegal due to procedural lapses. They cited the Allahabad High Court decision in AIR 1972 (All.) 16 and AIR 1972 (All.) 231, which emphasized that only those articles suspected of violating the Gold Control law should be seized. The Tribunal noted that the Panchnama did not distinguish between gross and net weight, leading to confusion. The partner's immediate statement and subsequent letter to the Collector clarified that only the net weight of gold in plastic and ivory bangles was recorded, not the gross weight. The Tribunal agreed that the Gold Control staff should have inventorized the items accurately and considered the appellants' objections, thereby avoiding the confusion.

2. Accounting Discrepancies in the Weight of Gold Ornaments:
The appellants contended that the excess weight of 1230.200 grams was due to the inclusion of the weight of plastic and ivory bangles, which should have been excluded. They supported their practice with the GS 12 Register and a Trade Notice from the Bombay Collectorate. The Tribunal found merit in the appellants' argument, noting that the Gold Control law and the Collector's own order acknowledged that gross weight should exclude non-gold materials. The Tribunal criticized the seizing staff for not making an item-wise inventory and for not considering the appellants' explanation, which led to the wrongful seizure of gold ornaments.

3. Confiscation of Excess Primary Gold:
The appellants failed to provide a satisfactory explanation for the excess primary gold of 28.200 grams. Their claim that it was a remnant from the goldsmith was deemed unconvincing. The Tribunal upheld the confiscation of the primary gold but allowed it to be redeemed on payment of a fine of Rs. 1,000.

4. Imposition of Penalties on the Firm and Its Partners:
The Tribunal referred to the Calcutta High Court decision in AIR 1975 (Cal.) 337, which held that a partnership is not a 'person' under Section 3(42) of the General Clauses Act, and penalties on both the firm and partners would amount to double punishment. The Tribunal set aside the penalty on the firm and reduced the penalties on the two partners from Rs. 500 each to Rs. 100 each.

Conclusion:
The Tribunal set aside the confiscation of gold ornaments and ordered their release within two months. The confiscation of excess primary gold was upheld, with an option for redemption on payment of a fine. The penalty on the firm was annulled, and penalties on the partners were reduced.