Customs, Excise and Gold Tribunal - Mumbai
Shri K.V. Vijaykumar vs Deputy Collector Of Customs (Prev.) ... on 31 March, 1989
Equivalent citations: 1989(22)ECR235(TRI.-MUMBAI)
ORDER
1. This is an appeal against the Order No. XVH(GC)7-8/87 dated 7.9.1987 passed by the Deputy Collector of Customs (Prev.), Gold Control, Bombay.
2. During the course of Personal Hearing Shri D.H. Shah Advocate representing the appellant reiterated all the submission made in the appeal memo.
3. I have carefully gone through the records of the case as well as considered all the submissions made in support of the appeal. I have also perused the relevant documents in respect of the subject matter of this appeal.
4. The Appellant Mr. K.V. Vijaykumar has preferred this appeal against the order of rejection of his application for the grant of Gold Dealer's Licence. The Appellant is one of the existing partners of the firm M/s. Laxmi Jewellery Mart, holding Gold Dealer's Licence No. 574/Gold/63 at Bombay. Since the appellant wants himself to get separated from the said partnershipbusiness in gold and to start his own, independent business as a Licensed Gold Dealer, the request was made by him to issue Gold Dealer Licence. The Appellant had given in writing an undertaking to the Gold Control Department that he would retire from the said partnership firm of M/s. Laxmi Jewellery Mart in view of Rule 2(dd) immediately on getting the Gold Dealer's Licence in his individual name. This kind of arrangement is permissible under law and in support of this, the appellant has relied upon the Trade Notice No. 4/79 dated 1.8.1979 issued by the Baroda Central Excise Collectorate. Government of India has also issued the similar advice to all the Collectors in its letter dated 28.9.1978 which is placed on record of this appeal-proceeding.
5. The application for the Licence was rejected on the following grounds which were stated in the Show-Cause Notice dated 9.3.1987:
(a) that a penalty of Rs. 1,000/- was imposed upon the appellant by the Collector of Customs under Gold (Control) Act in 1984;
(b) Gold Dealer's Licence held by M/s. Laxmi Jewellery Mart was cancelled by the Collector in 1986 wherein the appellant was one of the partners;
(c) Appellant is one of the existing partner of the firm M/s. Laxmi Jewellery Mart and hence he is not entitled to get separate Licence in view of Rule 2(dd) of the Licensing Rules;
(d) Appellant has not produced the documentary evidence in support of legal possession of the premises proposed for the business.
6. The lower authority has not discussed and has not given any finding on the aforesaid four grounds proposed by the Department for rejection of the application for Gold Dealer's Licence. The lower authority has simply given his finding on the following terms;-
The fact of conviction and penalty being imposed under the Gold (Control) Act has not been rebutted. The licence application merits rejection and accordingly, I reject the application of Shri K.V. Vijaykumar under Section 27(6)(a) of the Gold (Control) Act. The applicant is directed to claim for the refund of the licence fee deposited by him.
Sd/- (S.S. Renjhen) Dy. Collector of Customs (Prev.,) Gold Control Bombay.
7. There is a total misconception about the phrase 'conviction'. The (Collector of Customs has no authority to convict any person. The impugned order does not state that the appellant was convicted by the Criminal Court, The appellant had filed a sworn affidavit in this behalf before the "lower authority. The statement in this behalf made by the appellant on oath have not been rebutted in the impugned order. The evidence on affidavit is an admissible piece of evidence under Section 83(d) of the Gold (Control) Act. The lower authority is not right when he stated in the impugned order that the fact of conviction and penalty has not been rebutted. As a matter of fact, I find from the records that the appellant has not been convicted by the Court under the Gold Control or Customs Act. Duty lies upon the Licensing Authority to adjudge the allegations and charges levelled against the party.
8. The Appellant has stated on oath that the imposition of penalty of Rs. 1,000/- by the Collector under the Gold (Control) Act has been challenged by filing an appeal before the Appellate Tribunal and the said appeal is pending for decision. The appellant contends that he was penalised by the Collector because he happened to be the partner of the firm M/s. Laxmi Jewellery Mart. According to Appellant, there was no personal involvement on his part into the alleged contravention of the Gold (Control) Act. The lower authority has also not highlighted the alleged part played by the appellant in his impugned order.
9. Government of India has also declared in his Circular dated 14.1.1965 that "refusal of Licence or Tefusal to renew Licence would not be proper until departmental proceedings (including appeal and Revision proceedings where appeals and revision applications have been filed) are completed and the fact of contravention of Rules is established therein".
10. It is not correct and proper to reject the application for Licence on the ground of imposition of penalty upon the applicant who has applied for a Licence. What is required to be looked into is whether the applicant is personally involved in any serious kind of offence relating to gold. There is nothing disclosed in the show-cause notice to show that the applicant is an undesirable person in the gold trade. The rejection of the application for Licence on account of imposition of a penalty of Rs. 1000/- upon the appellant is not legal and proper. Issue of a licence is a discretionary power and the discretion must be used judicially when the Licensing Authority is deciding the Subject touching the fundamental right of a Citizen to carry on a business. Government of India in its Circular No. 21/64 has stated that "refusal of Licence to dealers will depend upon the gravity of the offence committed by them and is not to be resorted to indiscriminately in all cases of violations of Rules".
11. Second ground for the rejection of the application for Licence shown in the Show Cause Notice is that the Collector of Customs (Prev.) Bombay had cancelled the Gold Dealer's Licence of M/s. Laxmi Jewellery Mart on expiry of 31.12.1986. In this matter the appellant contends that M/s. Laxmi Jewellery Mart had obtained an order in Writ Petition No. 3549/86 restraining the Collector from cancelling the Licence on 31.12.1986 and hence the Gold Dealer's Licence could not be cancelled and the said Licence ordered to be renewed by the High Court and said Licence is in fact renewed till date. In this background, the fact of proposed cancellation of Licence of M/s. Laxmi Jewellery Mart cannot be used against the appellant for rejecting his application for a Licence. In this appeal, the appellant wants a Gold Dealer's Licence in his individual capacity while the Licence proposed to be cancelled as held by the partnership firm M/s. Laxmi Jewellery Mart. Individual and partnership firm are two distinct legal entity within the meaning of the phrase "dealer" given in Section 2(h) in Gold (Control) Act. In these premises, the rejection of the application for Licence is not in confirmity with law, equity and good conscience. As on today, the legal position is very clear that the Licence beld by M/s. Laxmi Jewellery Mart was not cancelled at all. The orders passed by the High Court are placed on record of this appeal-proceeding by the appellant.
12. Third ground of Rule 2(dd) for rejection of the application for Licence is totally misconceived. In this behalf, the relevant portion of the| Trade Notice issued by the Baroda Central Excise Collectorate is reproduced:
The matter has been considered and it has been decided that the applications from partners of licensed dealer's firm desiring to obtain separate licences may be entertained before they actually retire from the partnership. As and when the licensing authority decides to issue separate licence to any partner, the old partnership would cease to exist by virtue of provisions of Rule 2(dd) of the Licensing of Dealer's Rules and a specific order to this effect shall be issued simultaneously by the licensing authority.
The Appellant has given an undertaking to the licensing Authority that he would retire from the existing partnership firm on getting a Licence in his individual name. In view of this undertaking, the objection of Rule 2(dd) is not sustainable in law.
13. The impugned order in its all respect is not a speaking order and it is liable to be set aside.
14. Government of India has clarified the true scope of enquiry conducted pursuant to Rule 2 of the Gold Control (Licensing of Dealers) Rules, 1969 in its Circular dated 28.9.1978:
The matter has been re-examined in the light of the changed circumstances. The matters mentioned in Rule 2 of the Gold Control (Licensing of Dealers) Rules are not conditions of a mandatory nature governing the grant of a dealer's licences. It may not be necessary that in each and every case all criteria mentioned therein should be fully satisfied. These rules give discretion to the Licensing Authority.
15. The important fact to be remembered in the present case is that) the appellant in his capacity as a partner of M/s. Laxmi Jewellery Mart, a licensed Gold Dealer firm, is a licensed Gold Dealer as on today. The Gold| Dealer Licence of M/s. Laxmi Jewellery Mart is legal and valid as on to day The appellant cannot be compelled to remain in partnership even though h does not want to remain as partner. The act of denial of a Licence to i retiring partner would amount to a breach of his fundamental right. It i not the case of the appellant that he is the new entrant in gold trade.
16. It is alleged (hat the appellant has not produced documentary evidence in support of legal possession of the proposed licensed premises. There is nothing on record to show that the proposed premises are not in legal possession of the appellant. Possession is a prima facie proof of ownership. Rule 2(c) requires to inquire only whether the proposed premises are suitable and secure. There is no finding recorded that the premises are unsuitable and unsecure. This cause cannot be a ground for rejecting the application. The appellant can be asked to make his premises suitable at any time.
17. Taking into consideration all aspects, 1 hold that the appellant is entitled to get Gold Dealer's Licence in his individual capacity. On granting the Licence to the appellant, he should submit the retirement deed from the existing partnership firm M/s. Laxmi Jewellery Mart forthwith.
18. The impugned order is therefore not legal and proper and requires to be set aside. I, therefore, set aside the order and allow this appeal with consequential relief.