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Collector, Customs and Central Excise, Rajaswa Vihar, Bhubaneswar (Odisha) Versus Smt. Kamala Rani Ray, W/o Shri Krishna Ballav Ray

2015 (12) TMI 872 - ORISSA HIGH COURT

Confiscation of seized gold - ownership of gold / ornaments - violation of provisions of Gold (Control) Act, 1968 - Penalty u/s 74 - Held that:- gold seized were bangles having design on the outer side of the pieces and inner surface of those bangles were smooth. In the light of the finding given by the Additional Collector, CEGAT proceeded to decide the issue involved relying upon a decision in the case of M/s Choksi Purshottam Vishrambhai Vs. Union of India and others, reported in [1984 (1) TM .....

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cause with regard to the allegations made and is provided with the materials to that effect, she would not be in a position to give reply to the same. Thus, for compliance of the principles of natural justice, it was incumbent on the Additional Collector to give an opportunity to the opposite party to reply on the question of purity of the gold seized. As such, the opposite party had no occasion to give any reply on the report, if any, of the Government mint with regard to purity of the gold sei .....

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, neither any question with regard to the same was raised nor evidence to that effect was adduced by the Department at the time of adjudication before the Additional Collector. Hence, the same is not available to be raised by the petitioner at the stage of reference to this Court. Thus, the contention raised by Mr.Mishra to the effect that for non-acceptance of the report from Government mint with regard to purity of the gold seized the impugned order is vitiated, cannot be held to be correct. T .....

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rrectness of the order dated 26.07.1993 passed by the Customs, Excise & Gold (Control) Appellate Tribunal, East Regional Bench, Calcutta (for short, CEGAT ) in Appeal G-3/93 and Appeal G- 7/93 thereby allowing the Appeal No.G-3/93 filed by one Kamala Rani Ray and dismissing the Appeal No.G-7/93 filed by the Collector of Central Excise, Bhubaneswar (for short, the Department ). 2. Brief description of facts necessary for adjudication of the reference is as follows:- On 04.02.1974, the Central .....

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even shape and size. Accordingly, the Officers seized the said primary gold weighing 1171.500 grams in a cotton bag containing said gold on 04.02.1974, under a Panchanama. Said Sri Ray did not volunteer to give any statement on that. However, the independent Panchas, namely, Sri Babaji Charan Behera and Maheswar Sahu, who were present and had witnessed search operation, gave such statements which were recorded to be considered in the adjudication proceeding. Accordingly, show cause notice was is .....

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violation of Section 8 of the Act and penalty of ₹ 1,000/- was imposed on said Sri Ray under Section 74 of the Act. Being aggrieved by the said order under Annexure-1, Sri Ray moved the appellate authority, i.e., Collector, Customs and Central Excise, Bhubaneswr. The Appellate Authority vide its order No.29/Bhubaneswar/1977 dated 21.06.1976 (Annexure-2) rejected the appeal and upheld the order of the learned Additional Collector. Thus, Sri Ray moved the Revisional Authority, i.e., Governm .....

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weighing 1171.500 grams wrongfully taken away by Inspector of Central Excise and Customs (defendant No.2) from her possession and in the alternative, prayed for decree of ₹ 50,000/- as well as for compensation for depriving the plaintiff from enjoyment of those ornaments. In the said suit, Smt. Ray claimed ownership of the gold seized by the Central Excise Officer on 04.02.1974. She contended that she was using the seized gold as her ornaments. The same were not primary gold and did not b .....

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that gold seized cannot be confiscated without giving opportunity to plaintiff under Section 79 and defendants are directed to take steps so that the adjudicating authorities dispose of the proceeding for confiscation after giving notice to the plaintiff. Till then, the gold seized cannot be disposed of in any manner. 15. In the result, First Appeal is allowed. No costs. Trial Court shall return M.O. I to the plaintiff after the period of appeal against this judgment expires. 4. In obedience to .....

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ssailing the said order, the opposite party preferred Appeal No.4/GC/BBSR/92 before the Collector of Central Excise (Appeals), Kolkata, who by his order dated 30.04.1992 (Annexure-9) set aside the order under Annexue-8 and remanded the case for de novo adjudication by obtaining expert opinion as to whether the seized gold bangles were ornaments or not. Being aggrieved, the Department filed Appeal before the CEGAT in G-7/93 against the order under Annexure-9 and the opposite party also preferred .....

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the learned CEGAT is correct in concluding that the show cause notice dt.14.5.90 is hit by limitation under section 79 of the Gold Control Act considering decision not by statutory authority taking into consideration the judgment dated 17.10.89 and not the decree dated 25.1.90 when decree is also a part of the order of the Court & for drawing the decree, it was only Court s duty and the act of judgment is incomplete without decree? (ii) Whether the learned CEGAT is correct in concluding that .....

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examine the seized gold for effective adjudication of Question Nos.(ii) and (iv) and accordingly vide order dated 10.09.2015 directed as follows. ….Accordingly, the matter stands adjourned to 25.09.2015 for orders on which date, the opposite parties are directed to produce the seized gold before this Court by providing necessary security as may be appropriate……. Pursuant to the direction of this Court, the seized gold was produced before this Court on 08.10.2015 through Sri .....

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period as the Collector of Central Excise or of Customs may allow. Where a fresh adjudication under the Act is initiated, the period of limitation would be six months from the date of order of fresh adjudication or as extended by the Collector. In the instant case, there is no direction for fresh adjudication by any authority under the Act. Further, this Court in F.A. No.122/77 in exercise of Civil Appellate jurisdiction directed to give a chance of hearing to Smt. Kamalarani Ray, which at any s .....

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a formal expression of final adjudication. The effective direction is made only in the judgment. In the instant case, pursuant to the judgment of this Court dated 17.10.1989 in F.A. No.122/77 notice was issued on 14.05.1990, which is clearly barred by limitation. Hence, the question raised by the petitioner has no force and should be answered in the negative. 9. In order to analyze the rival contentions of the parties on question No.(i), it would be profitable to reproduce Section 79 of the Gold .....

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ch reasonable time as may be specified in the notice against the confiscation or imposition of penalty mentioned therein and if he so desires, of being heard in the matter : Provided that the notice and the representation referred to in this section may, at the request of the owner or other person concerned, be oral: Provided further that where no such notice is given within a period of six months from the date of the seizure of the gold, conveyance or animal or such further period as the Collec .....

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the owner of the gold etc. is given a notice in writing. Second proviso to the said Section provides that where no such notice is given within a period of six months from the date of seizure of the gold or such further period as the Collector may allow such gold etc. shall be returned after expiry of that period to the person from whose possession it was seized. The explanation to second proviso further makes it clear that where a fresh adjudication under the Act is directed, the period of limi .....

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er, the word order in the explanation to second proviso of Section 79 of the Act refers to order for fresh adjudication . Thus, it no doubt includes the direction for fresh adjudication made by this Court in exercise of civil appellate jurisdiction. Admittedly, the process of fresh adjudication was initiated pursuant to the direction of this Court in F.A. No.122/77 without assailing the judgment in any higher forum or raising any objection to the competency of this Court to give such a direction .....

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Vs. Gopal Charan Mohanty & Ors., reported in 1975 (1) CWR 182 : 41 (1975) CLT 359, wherein this Court relying upon a Full Bench decision of this Court in the case of Sri Ramachandra Mardaraj Deo Vs. Bhalu Patnaik & Ors, reported in AIR 1950 Ori. 125, held as under: 8. Order 20, Rule 7, Code of Civil Procedure lays down that the decree shall bear the date on which the judgment was pronounced. As the date of decree under this Rule is the date of the judgment, the date of the decree as leg .....

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of the Court. Therefore the legislature made express provision directing that the decree shall bear the date of the judgment. As the law on the point has been well settled as stated above, the Petitioners suit, admittedly instituted beyond a period of 3 years after the date of the decree, i.e. after the passing of the judgment on 20-9-1962 in the aforesaid suit (Title Suit No.36 of 1961), was clearly barred by limitation. Accordingly, the finding of the Courts below to this effect is well founde .....

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Hence, this question is answered in the negative against the petitioner. 11. Arguing on the question No.(ii), Mr. Mishra, learned Senior Advocate for the Department strenuously contended that the question as to whether the seized articles were primary gold or ornaments is not an issue before the CEGAT and thus, any finding of the CEGAT to the effect that the seized gold was the ornaments, is vitiated. Mr. Acharya, learned counsel for the opposite party refuting the same contended that the quest .....

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, including the impugned order. On perusal of the record, it appears that the main contention of the Department in the entire proceeding including the suit filed by the opposite party as well as in the First Appeal arising there-from, the primary contention of the Department was that the seized gold were round shaped primary gold of uneven shapes and not fit to be used as ornament. Thus, the contention of Mr.Mishra is wholly misconceived and baseless so far as the finding of the CEGAT to the eff .....

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rought by the Officer of Cuttack Division and the container of the gold containing 34 pieces of gold was opened in the presence of the party. It is seen that all the bangles are of different sizes having design on the outer side of the pieces and inner surface is smooth. There is no noticeable wear and tear on the pieces. Thus, it appears that the gold seized were bangles having design on the outer side of the pieces and inner surface of those bangles were smooth. In the light of the finding giv .....

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designs upon the bangles. The bangles are crude and would not be purchased by the sophisticate but they are not such as cannot be called ornaments within the meaning of that word in Section 2(p) of the Act. There an ornament is defined as a thing, in a finished form, meant for personal adornment or for the adornment of any idol, deity or any other object of religious worship, made of, or manufactured from, gold, whether or not set with stones or gems (real or artificial), or with pearls (real cu .....

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ription and workmanship akin to the seized bangles are in fact used as ornaments by ladies. My observation of the bangles is that there is nothing in the workmanship thereof which can exclude them from being used as ornaments or called such. 14. For effective adjudication of questions Nos.(ii) and (iv) formulated in the present proceeding, this Court, in course of hearing, felt it necessary to examine the seized gold and directed for its production vide order dated 10.09.2015 which was produced .....

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ner to take a different view in the matter. 15. Arguing on the question No.(iv) framed by this Court, Mr.Mishra, learned Senior Advocate submitted that learned Tribunal has erred in law in not taking into consideration the result of the purity test specifically when purity was established by test in Government mint is not disputed. Mr.Acharya, learned counsel for the opposite party, on the other hand, submitted that the learned Tribunal was correct in concluding that the purity of the ornaments .....

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