TMI Blog1988 (1) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 under Section 73, besides imposing a penalty of Rs. 50,000 on each of the two appellants under Section 74 of the Act. 2. Appellant Kuruvila is a licensed Gold Dealer and is running a Gold Dealer shop, which is a proprietary concern under the name Poornima Jewellery at Trichur. Appellant Jose is the Power of Attorney of appellant Kuruvila looking after the gold business of Kuruvila. On 17-8-1983 at about 11 a.m. the Central Excise authorities visited Poornima Jewellery, the licensed premises of appellant Kuruvila at Trichur, and seized under a mahazar the following gold and gold ornaments, which had not been accounted for in the statutory accounts: 1. New gold ornaments, Bangles, Chain, Stud ring locket, Thali, cross etc. 2020.750 gms .22 ct. 2. Old ornaments, bangle, stud, ring, chain etc. 234.800 gms. 20-21 ct. 3. Me.l.t.ed gold 6.200 gms. 20-21 ct. Appellant Jose gave a statement before the authorities on 25-8-1983 that he is conducting the gold business in Poornima Jewellery in the absence of proprietor Kuruvila and is also a Power of Attorney Holder for him. He further stated that under the said Power o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order has been given in his favour. The learned counsel nevertheless submitted that so far as appellant Jose is concerned, even though he has not specifically put in a plea claiming the same, he may be permitted to redeem it. It was urged that the gold and ornaments in question did not form part of the stock in trade of Poornima Jewellery and, therefore, there is no obligation cast on the licensee to account it. The learned counsel further contended that a careful reading of the statements of appellant Jose and Thommachan would reveal that appellant Kuruvila did not have any knowledge about the very presence or existence of the gold and ornaments in his licensed premises nor was he in any way responsible for the same being brought over to his licensed premises in contravention of law. The learned counsel further submitted that even it is assumed that the gold and ornaments formed part of the stock in trade so as to be accountable in terms of Section 55 of the Act, inasmuch as they were brought into the shop only in the morning on 17-8-1983 and since the seizure took place within an hour thereafter, appellant Kuruvila cannot be proceeded against on a charge of non-accountal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion including prosecution is directed to be waived by the said instructions or Circular, which is binding on the adjudicating authority as well as this statutory Tribunal. The learned counsel also placed reliance on various rulings of the High Courts in regard to the binding nature of the said instructions of the Finance Ministry, which we shall adver to at the appropriate place. Finally, in any event, the learned counsel urged, the quantum of fine and penalty is excessive and would warrant a reduction particularly when the purity of the gold is ranging from only 20 to 22 ct. and also because in respect of the commission of the offence penalty has been levied on the licensee as well as the Power of Attorney of the licensee. 4. Shri Bhatia, the learned Senior D.R., submitted that the gold and ornaments were actually found in the licensed premises and admittedly had not been accounted for. The learned Senior D.R. placed reliance on Section 33 of the Act and submitted that gold and ornaments found in business premises and not accounted for should be deemed to be part of the stock in trade of such dealer or held by him in his capacity as a dealer. The learned Senior D.R. further re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions under the Act and go scot-free. The learned Senior D.R. urged that such a construction would lead to a situation of manifest absurdity or anomaly rendering the very Act itself totally unworkable enabling the offenders go scot-free as it were. 5. We have carefully considered the submissions made before us. The first question that arises for our consideration is whether the gold and ornaments were part of the stock in trade of appellant Kuruvila or that appellant Kuruvila was not in any way connected with the same as a licensed Gold Dealer. The gold and gold ornaments admittedly had not been accounted for and they were admittedly found in the licensed premises of appellant Kuruvila. The evidence bears out that the gold and ornaments were recovered from the briefcase with inscription Poornima Jewellery and the briefcase itself was found in the midst of rubbish. Appellant Jose has given a statement on 25-8-1983 to the effect that he was the Power of Attorney of the licensee appellant Kuruvila and was looking after the gold business in Poornima Jewellery and that the gold and ornaments under seizure were recovered from Poornima Jewellery wherein it had been kept by him for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture of the same by certified goldsmiths out of the old ornaments, which were purchased at the instance of appellant Kuruvila, as stated above, including his own personal ornaments. In terms of Section 31 of the Act read with Section 55 a licensed Gold Dealer cannot buy or acquire or receive or accept any ornament or gold from a person, who is not a licensed dealer or refiner and even if he were to buy the same from a person, who is not a dealer, it is subject to conditions stipulated in Section 31 of the Act. In the present case it is not the case of appellant Kuruvila that the new ornaments, which were manufactured out of the old ornaments purchased by him including his own ornaments, were not for purposes of sale. On the other hand in the entire records there is no plea to the effect that the new ornaments were not intended for sale. Apart from it, the nature and quantity of the ornaments are also pointers to the conclusion that the ornaments were only for purposes of sale. Therefore, if Kuruvila, the licensed dealer, has purchased or acquired possession of old ornaments, as admitted by him, it should .be properly accounted for in terms of Section 55 of the Act, becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made only for purposes of sale in the shop and as such even at the time of initial purchases of old ornaments, which were done admittedly for purposes of re-manufacturing new ornaments for eventual sale, should be accounted for in terms of Section 55 read with Section 31 of the Act and Rule 13 of the Gold Control (Forms etc.) Rules, 1968, as rightly contended by the learned Senior D.R. Therefore, from any point of view the charges of contravention have been clearly established. The plea of the learned counsel that in terms of Sections 227 and 228 of the Contract Act, referred to supra, the principal would not be liable is not acceptable, because the Power of Attorney specifically entrusted with the charge of looking after the gold business has not only committed contravention himself but, as stated above, appellant Kuruvila, the principal and the licensee, was very much a party and privy to the whole act. 6. The learned counsel expatiated for a considerable length of time on the Amnesty Scheme referred to supra and contended that the impugned order itself is contrary to law. In this context we may point out that the learned counsel for the appellants did not produce before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the persons who are called upon to pay duty and the department. It is true the assessing authorities as well as the appellate authorities are judges in their own cause; yet when they are called upon to decide disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others. Then it is a misnomer to call their orders as their judgments; they would essentially be the judgments of the authority that gave the directions and which authority had given those judgments without hearing the aggrieved party. The only provision under which the Board can issue directions is Rule 233 of the Rules framed under the Act. That rule says that the Board and the Collectors may issue written instructions providing for any supplemental matters arising out of these Rules. Under this rule the only instruction that the Board can issue is that relating to administrative matters; otherwise that rule will have to be considered as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay down the principles which have to be followed by the tribunals in dealing with the said matters. The scope of the jurisdiction of the tribunals constituted by statute can well be regulated by the statute and principles for guidance of the said tribunals may also be prescribed subject of course to the inevitable requirement that these provisions do not contravene the fundamental rights guaranteed by the Constitution. But what law and the provisions of law may legitimately do cannot be permitted to be done by administrative or executive orders. This position, is so well established that we are reluctant to hold that in enacting Section 43-A the Madras Legislature intended to confer power on the State Government to invade the domain of the exercise of judicial power. In fact, if such had been the intention of the Madras Legislature and had been the true effect of the provisions of Section 43-A, Section 43-A itself would amount to an unreasonable contravention of fundamental rights of citizens and may have to be struck down as unconstitutional. That is why the Madras High Court dealing with the validity of Section 43-A had expressly observed that what Section 43-A purported to do w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch reliance is placed, is in exercise of any statutory power, the learned counsel was not able to produce before us any statutory notification issued by Finance Ministry or any other competent authority having a binding force of law. The learned counsel submitted that it should be presumed that the instructions of the Finance Ministry should be statutory in character. We are afraid, we will not be able to accept this plea of the learned counsel. Apart from the fact that there is absolutely nothing on record nor any material produced before us to show that the instructions of the Finance Ministry by way of circular, are in exercise of any statutory power, as rightly contended by the learned Senior D.R., no order is proved to have been issued in terms of Section 5 of the Gold (Control) Act, 1968 by the Administrator. Even in terms of Section 5 of the Act the Administrator can only issue directions or orders not inconsistent with the provisions of the Gold (Control) Act, 1968 and only for purpose of carrying out the provisions of this Act. We also note that the instructions under the Amnesty Scheme referred to and relied upon by the learned counsel will not govern the charges of contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence to the primary gold under seizure. The learned counsel made a faint attempt to claim the primary gold on behalf of appellant Jose and pleaded for redemption of the same. Appellant Jose admittedly has not made a claim for the same at any time till now and even in the appeal before us he has not claimed it. Therefore, we reject the claim of appellant Jose. Tough there is a disclaimer by appellant Kuruvila of the primary gold before us, under the impugned order redemption of the same has been permitted by him. There is no cross objection by the Department against that part of the order. In such a situation we record the disclaimer of Kuruvila and leave the issue as such. 11. We note that the purity of the gold and ornaments is only 20 to 21 ct. and keeping this in mind and also the value of the same at Rs. 3,93,458.25 we reduce the quantum of fine from Rs. 1,00,000 to Rs. 75,000 (Rs. Seventy five thousand). We reduce the penalty on appellant Kuruvila from Rs. 50,000 to Rs. 25,000 (Rs. Twenty-five thousand) and reduce the penalty on appellant Jose from Rs. 50,000 to Rs. 10,000 (Rs. Ten thousand). 12. Except for the above modifications, the appeals are otherwise dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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