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TMI Blog1984 (6) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... s, on 22-10-1982 in the presence of witnesses. The statutory account books of the firm were scrutinised. The balance as on 22-10-1982 was arrived at as follows :- G.S. 11 Register - Old Gold ornaments - Nil Standard Gold bars - 10,000 Gms. Primary Gold - Nil G.S. 12 Register - New Gold Ornaments (12 cts) - 308.800 gms. New Gold Ornaments (22 cts) - 9352.000 gms. Repairs Register - Then, a declaration regarding the stock-in-trade as on the same date was obtained from Shri Jhaverilal Popatlal Dedhia, a partner of the firm present in the shop. Thereafter, the stock-in-trade was weighed with the following results :- G.S. 11 Register - Old Gold ornaments - Nil Standard Gold - 10,000 gms. Primary Gold - 28.200 gms. G.S. 12 Register , New Gold Ornaments (12 cts) - 332.000 gms. New Gold Ornaments (22 cts) - 10559.000 gms. Repairs Register - Nil Thus, there was excess unaccounted stock of new gold ornaments (22 cts) weighing 1207.00 gms. and 23.200 gms. (12 cts.) and primary gold weighing 28.200 gms. (22 cts). No satisfactory explanation was forthcoming in respect of the said excess stock which was, therefore, seized under the provisions of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther stated that if the inventory of the entire stock-in-trade was made in the Panchnama, then it would have been possible to prove the weight of plastic or ivory content of the bangles. 5. After considering the submissions made before him in writing and in the course of the personal hearing, the Collector passed the impugned order which is now under challenge before us. 6. Shri D.H. Shah, the learned Counsel for the appellants, made the following points before us in the course of the hearing :- (i) The seizure was, procedurally speaking, illegal since it did not comply with the requirements of law. It was incumbent on the part of the seizing officers to inventorize the articles in respect of which they believed the provisions of the Gold Control law had been violated. Only those articles which were prima facie offending could be seized. This is the clear 'ratio of the Allahabad High Court's decision by a learned Single Judge reported in AIR 1972 (All.) 16, in the case of Kashinath v. Collector of Central Excise, Allahabad. The said decision was confirmed by a Division Bench of the High Court on an appeal being filed by Government-AIR 1972 (All.) 231. (ii) The gross w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r does not throw any light on this aspect nor did the vouchers. 9. In his counter reply, Shri Shah stated that the Collector had not examined the vouchers, etc. In any case, the appellants could not have correlated them with the bangles. However, what was important was whether there were 150 bangles or not and this was borne out by the deposition of the investigating officer. The number taken as 70 was based on guess work. 10. We have carefully considered the submissions before us. Shri Shah vehemently contended before us that the seizure of the articles was riddled with irregularities and, therefore, it was illegal. It is true, as Shri Shah says, that the Panchnama does not make a distinction between gross weight and net weight. In fact, it would appear from the Panchnama that the weighmcnt particulars of the gold ornaments found on physical weighment of stock-in-trade were the gross weight. Though the Panchnama says that the partner of the shop could not satisfactorily account for the possession of the excess ornaments and primary golds, Shri Z.P. Dedhia in his statement recorded on the very day of seizure, had clearly stated that he was not aware that plastic and ivo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether there was, in fact, any infringement of the provisions of the Gold (Control) Act. If the net and gross weights were ascertained separately, it is possible that the stock-in-trade of ornaments might have been found to tally with recorded balance. That this is so, is amply borne out by the Collector's order itself where he has conceded the appellants' contention that the weight of the plastic/ivory should not have been taken into consideration. The Collector further states that if the gross weight was to be taken, due allowance would have to be made for the weight of plastic/ivory. Otherwise, it would give a distorted version. On this basis, the Collector gave the benefit of doubt in the matter of gross weight in respect of 70 bangles. This has been based on the deposition of the Supdt., Gold Control during the cross examination by the Counsel for the appellants. In his deposition, Shri Machado, Supdt. had stated that he did not remember the exact number of bangles but that there could have been about 50 to 70 such bangles. The `Collector chose to rely on this and gave allowance in respect of 70 bangles. Since the Supdt. could not remember the number of bangles nor was it rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pees one thousand only).
13. As regards the penalty imposed on the appellants, we notice from the Calcutta High Court's decision in Tarak Nath Sen and Others v. Union of India and Others reported in AIR 1975 (Cal.) 337 that it has been held that a partnership is not a 'person' within the meaning of Section 3(42) of the General Clauses Act. The rights and obligations of since a firm are really rights and obligations of individual partners of the firm. Since the firm is not a legal entity and Section 140 of the Customs Act is inapplicable to the adjudication proceedings, imposition of penalties also upon the firm would, in effect, be imposition of double punishment on the partners on the same set of facts. The ratio of the said decision is applicable to the facts of the present case since Section 93 of the Gold Control Act which deals with offences by companies is not applicable to the present firm. In the circumstances, we set aside the penalty imposed by the Collector on the firm. However, in the light of our findings regarding the seized gold ornaments, we reduce the penalty on the 2 partners of the firm from ₹ 500 each to ₹ 100 each. X X X X Extracts X X X X X X X X Extracts X X X X
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