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TMI Blog1987 (8) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... een challenged before us. 4. On July 9, 1968 the officers of the Central Excise, Nagpur, searched the residential premises of Nem Kumar and seized 10 slabs and 9 pieces of gold and 230 gold coins, weighing about 42,404 grams having at that time a market value of Rs. 7,63,000/-, which were kept in a cupboard inside a big Godrej iron-safe. It is not disputed that the seized gold was primary gold. 5. On July 10, 1968, the officials of the Central Excise separately recorded the statements of Ratanbai and Nem Kumar. It was stated by Ratanbai that the seized gold was the 'self-earned property' of her late husband, and that the same had been kept in the iron-safe about 8/9 years ago. She admitted that the keys of the shelf had all along remained in her possession. Nem Kumar in his statement denied any knowledge about the gold. He said that he had come to know of the existence of the gold for the first time when it was found out during the search. A declaration in respect of seized gold was filed by Ratanbai to the Central Excise, Nagpur, on July 29, 1968. 6. The Collector of Central Excise, Nagpur, served two separate notices on Ratanbai and Nem Kumar calling upon them to show cause wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench did not agree with the interpretation of the learned Judge on Section 71(1) of the Gold Control Act including the proviso thereto. We shall have occasion to refer to the interpretation put forward on Section 71(1) by the Division Bench of the High Court and it is sufficient to state here that the Division Bench set aside the judgment of the learned Single Judge and allowed the appeal of the respondents. Hence this appeal by special leave by the sons of Nem Kumar, Shantabai and Nem Kumar himself. 12. Under Rule 126-I of the Defence of India Rules, 1962, every person other than a dealer was required to make a declaration as to the quantity, description and other prescribed particulars of gold (other than ornaments) owned by him within thirty days from January 9, 1963, the date on which the Defence of India (Amendment) Rules, 1963 came into force. Rule 126-H -was amended by the Defence of India (Fourth Amendment) Rules, 1966. Sub-rules (1-A) to (1-G) were added to Rule 126-H. Sub-rule (I-A) provided as follows :- "(1-A) - No person (other than a dealer or refiner licensed under this Part) shall, after the expiry of a period of six months from the commencement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 71 as unconstitutional. Thereafter, by Gold (Control) Amendment Act, 1971, a new Section 71(1) was enacted with retrospective effect from 1-9-1968. Sub-Section (1) of Section 71, with which we are concerned, is as follows :- "Sec. 71(1) - Any gold in respect of which any provision of this Act or any rule or order made thereunder has been, or is being, or is attempted to be, contravened, together with any package, covering or receptacle in which such gold is found, shall be liable to confiscation : Provided that where it is established to the satisfaction of the officer adjudging the confiscation that such gold or other thing belongs to a person other than the person who has, by any act or omission, rendered it liable to confiscation, and such act or omission was without the knowledge or connivance of the person to whom it belongs, it shall not be ordered to be confiscated but such other action, as is authorized by this Act, may be taken against the person who has, by such act or omission, rendered it liable to confiscation." 17. It is contended on behalf of the appellants that Ratanbai by her omission to dispose of the gold by sale or to convert the same into ornament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered to be confiscated. In other words, the gold would be allowed to be retained by the owner thereof. It is submitted that such interpretation would render Section 8(1) nugatory. Section 8(1) is in the following terms :- "Sec. 8(1). Save as otherwise provided in this Act, no person shall - (i) own or have in his possession, custody or control, or (ii) acquire or agree to acquire the ownership, possession, custody or control of, or (iii) buy, accept or otherwise receive or agree to buy, accept or otherwise receive, any primary gold." 21. There can be no doubt that in view of Section 8(1), no person can own, acquire or retain possession, custody or control of primary gold. It has already been noticed that under clause (I) of sub-rule (1-B) of Rule 126-H of the Defence of India (Fourth Amendment) Rules, 1966, it was enjoined that the owner in possession, custody or control of primary gold was bound to either sell such primary gold to a licensed refiner or dealer or deliver the same to a licensed or certified dealer or goldsmith for conversion thereof into ornaments within period of six months from September 1, 1967, the date of commencement of the said Rules. Sub-rule (1-A) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not to be confiscated in view of the proviso to Section 71(1), the owner thereof gets it back, but it does not mean that he will be entitled to retain possession of such primary gold which is forbidden by Section 8(1) of the Gold Control Act. In such a case, the owner has to sell the primary gold to a licensed refiner or dealer or deliver the same to a dealer or goldsmith, licensed or certified, as the case may be, that is to say, in the same manner and following the same procedure as was laid down in sub-rule (1-B) of Rule 126-H of the Defence of India (Fourth Amendment) Rules, 1966 and, in our opinion, so interpreted there will be no conflict between the proviso to Section 71(1) and the provision of Section 8(1) of the Gold Control Act. Indeed, the Administrator under the Gold Control Act has issued an Order No. 11/76 F.131/41/75-G.C.ii, dated 30-7-1976 whereby it is directed, inter alia, that where gold is seized and confiscated and thereafter released and if such release relates to primary gold, it is further directed: (a) such primary gold shall be sold to a licensed dealer or got converted into ornaments; (b) the person concerned shall, within one month of taking back into ..... 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