TMI Blog1988 (8) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the authorities had reason to believe that the currency represented the sale proceeds of contraband gold, the authorities effected seizure of the currency under a mahazar as per law. Appellant Lalith Kumar gave a statement before the authorities that the currency actually represented the sale proceeds of gold ornaments sold to appellants Fashion, Jewellery. The authorities made verification with appellant Fashion Jewellery, who slated that though they purchased gold ornaments from appellant Lalith Kumar they had not made the cash payment but the purchase was on credit basis as reflected in their accounts. Subsequently, appellant Lalith Kumar on 1-4-1987 sent a petition to the Collector of Customs, Cochin, that the currency under seizure was brought from Nellore and belonged to his master, appellant Mohanlal B. Jain, who was a licensee Gold Dealer having business under the name and style M/s. South India Jewellers at Nellore. It is in these circumstances, after further investigations, proceedings were instituted against the appellants, which ultimately resulted in the present impugned order now appealed against. 3. Shri Suganchand Jain, the learned counsel for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make for any contravention under Section 27(7)(b) of the Gold (Control)-Act, 1968 and likewise M/s. Fashion Jewellery also could not be held to be an abettor in regard to the same. The learned counsel further submitted that the very same adjudicating authority has released under the Impugned order 1394 gms. of gold ornaments seized from Mohanlal B. Jain on the ground that no sale had taken place in regard to the same and that he had proper records for carrying the ornaments from Nellore to Cochin. 4. Shri Krishnan, the learned D.R., referred to the reasoning of the adjudicating authority in the impugned order and contended that unsatisfactory explanation on the part of appellant Mohanlal B. Jain would lead one to believe that the currency represented the sale proceeds of contraband gold though there is no evidence for the same. Regarding the binding nature of the order of the Andhra Pradesh High Court, the learned D.R. submitted that he has no submissions to make in regard to the same. 5. We have carefully considered the submissions made before us. The fact that a sum of Rs. 5 lakhs was seized from the possession of appellant Lalith Kumar, who is an employee under appellant Moh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the fact that immediately after the seizure both Shri Lalith Kumar and Shri M.S. Jain-admitted the seized amount being the sale proceeds of gold jewellery sold to M/s. Fashion Jewellery. This leads to further conclusion that the gold is not of licit origin. It is all through a clever manipulation of account and by purchase of a small quantity of standard gold bears that M/s. South India Jewellers have been functioning. This conclusion is further supported by the fact of various entries in the extracts of cash book submitted by the party. It is also noticed from the extracts of the cash book that their purchases of standard gold bars is far too less compared to the sale of gold jewellery. This also should go to prove that the gap Is filled by gold obtained through illicit way. 6. The reasoning of the adjudicating authority that the purchase of standard gold bars by appellant Mohanlal B. Jain or by M/s. South India Jewellers, Proprietor appellant Mohanlal B. Jain, is far too less compared to the sale of gold jewellery and this would prove that the gap is filled by gold obtained through illicit way" Is a mere surmise without any basis. The show cause notice also does not conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... throughout the country directing them to withdraw the facility till then afforded to licensed dealers to send ornaments for sale through travelling salesmen and the Trade Notices issued by the Collectors of Central Excise pursuant thereto withdrawing the said facility with immediate effect. We also would like to note that a Division Bench of the Punjab and Haryana High Court in the case of G/an Chand Kapurv. Assistant Collector of Central Excise, Amritsar and others, has held that in view of the provisions of sub-section (7) of Section 27 of the Gold (Control) Act, 1968 and the Rules, inter-State movement of gold ornaments and sale thereof outside the licensed premises is not permitted and an endorsement on a licence granted by the Administrator would certainly be beyond the provisions of the Act and the Rules and the said endorsement has to be treated to be without jurisdiction ab initto and nullity in the eyes of law . The Division Bench of the Punjab and Haryana High Court was considering the validity of the order of the Gold Control Administrator permitting licensees to transact business outside the licensed premises through travelling salesmen. The Division Bench further held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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