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Issues Involved:
1. Legality of the appellant's interception and seizure of gold. 2. Alleged contravention of Section 55 of the Gold (Control) Act. 3. Validity of the confiscation order and the imposed fine and penalty. Detailed Analysis: 1. Legality of the appellant's interception and seizure of gold: The appellant challenged the Department's claim that he was intercepted near the Stock Exchange Building with seized gold and account books. The appellant argued that he was forcibly taken from his shop to the Gold Control Office, as corroborated by his immediate statement after the seizure and a letter dated 1-5-81. The appellant's account was supported by an affidavit from a shopkeeper, who stated that the appellant was brought to his shop by Gold Control Officers and made to sit there until a taxi was fetched. The appellant contended that if he had been intercepted in a busy locality like Kalbadevi, there would have been witnesses from the locality, which the Department failed to produce. The Department's reliance on the panchnama was challenged, as it is not substantive evidence but merely corroborative. The appellant's advocate did not cross-examine the panchas, but this was not considered an adverse inference. The reports by the three inspectors were identically worded, raising suspicion of fabricated evidence. The Collector's adverse inference against the appellant for not cross-examining the inspectors was deemed unjustified. 2. Alleged contravention of Section 55 of the Gold (Control) Act: The appellant admitted to not maintaining accounts for three transactions, violating Section 55. The transactions included the purchase of 89.800 gms. on 24-4-81, the sale of 221.650 gms. on 25-4-81, and the purchase of a 200 gms. gold bar on the day before the seizure. The appellant explained that the entries were not made because the part-time accountant did not turn up. This explanation was not provided immediately but came up later in a letter dated 26-1-82, diminishing its credibility. The appellant did not provide an affidavit from the part-time accountant. The evidence supported the contravention of Section 55, making the seized gold liable for confiscation. 3. Validity of the confiscation order and the imposed fine and penalty: The Collector's findings of contraventions of Section 36 and Rule 13(1) were not supported by evidence and were set aside. The contravention of Section 55 was upheld, but the imposed fine of Rs. 25,000/- was reduced to Rs. 2,500/-, considering the proximity of the transactions and the date of seizure. The penalty of Rs. 2,500/- was imposed due to the Collector's findings of contraventions of Section 36 and Rule 13(1), which were not accepted. Given only the contravention of Section 55, the circumstances did not warrant any penalty, which was thus set aside. The appellant was granted consequential relief if the fine and penalty were paid. Conclusion: The judgment set aside the findings of contraventions of Section 36 and Rule 13(1), upheld the contravention of Section 55, reduced the fine to Rs. 2,500/-, and set aside the penalty, granting the appellant consequential relief.
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