Customs, Excise and Gold Tribunal - Delhi
Jeet Mal vs Collector Of Customs And Central Excise on 4 November, 1987
Equivalent citations: 1988ECR430(TRI.-DELHI), 1988(33)ELT463(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Brief facts of the case are that certain quantity of gold ornaments was recovered from the premises of the appellant which exceeded the quantity of 4000 gms. It was, therefore, alleged that the appellant had contravened the provisions of Section 16 of the Gold Control Act for not declaring the gold ornaments to the Gold Control authorities as provided under the said Act.
The appellant, however, contended before the adjudicating officer that he was not the sole owner of the gold ornaments found from his possession and some of the gold ornaments seized from his premises belonged to various other persons as follows :-
(1) Mother - l,581 gms. (1,224 gms. net) (2) Daughter - 108 gms. (96 gms. net) (3) Other daughters- 340 gms. (285 gms. net) (4) Widow Sister - 224 gms. (178 gms. net) (5) Wife - 1,384 gms. (1,153 gms. net)
Learned Collector of Customs and Central Excise, Jaipur in his adjudication order has found the explanation of the appellant as tenable. He has accordingly ordered release of the gold ornaments to the respective owners.
2. The appellant has stated in his appeal memorandum that on 11-9-1986 the department has released only 2768 gms. of gold (net weight 2318 gms.) and has withheld 1581 gms. (net weight 1224 gms. gold) on the ground that the ownership of this gold rests with the mother of the appellant who has since expired.
3. The appellant has now submitted that the gold was seized from his premises and accordingly from his possession. Show cause notice was issued to him and to his brother Prem Chand. No show cause notice was issued to the other persons who claimed the ownership of the gold. As a person from whom the gold ornaments have been seized he should be treated as the owner and therefore, those gold ornaments though belonging to his mother, since expired, should be released to him. This is apparent from the scheme of the Gold Control Act as well. Learned advocate for the appellant relies on Section 79 of the Gold Control Act which stipulates that show cause notice is required to be issued to the owner of the gold. Since no show cause notice was issued to the mother, therefore, according to the learned advocate, Shri Jeet Mal has been treated as the owner of the gold by the department. He has also drawn attention to Section 99 of the Gold Control Act which states that "any person who has in his possession, custody or control any primary gold, articles or ornaments shall be presumed, unless the contrary is proved to be the owner thereof." It is on the basts of this statutory presumption that the appellant alone was issued the show cause notice in terms of Section 79 ibid. Therefore, in terms of the adjudication order of the Collector the gold ornaments belonging to the mother of the appellant, since expired should be released to him. In support of this proposition the learned advocate for the appellant has relied on a number of authorities which are as follows :-
(1) 1962 AIR Tripura 50 (2) 1963 AIR Bombay 83 (3) 1986 (25) ELT 57 (4) 1983 (12) ELT 687 On a query from the Bench that Shri Prem Chand, the other brother of the appellant has also laid his claim to his share of the gold ornaments belonging to his mother and has made an application accordingly, learned advocate has stated that he does not have any locus standi on the gold ornaments. In case he claims any share in these gold ornaments belonging to their mother he should get his title from a competent court of law and then get his share. In the meantime, the department has no locus standi to withhold the release of the ornaments in terms of the adjudication order.
4. Learned SDR has merely stated that when the gold is ordered to be released to the owner of the gold it means the successors of the owner if the owner is no longer alive to claim the gold.
5. I have carefully considered the pleas advanced by the learned advocate for the appellant but I am unable to agree with his plea. It is no doubt true that based on the presumption raised in Section 99 of the Gold Control Act the show cause notice was issued to Shri Jeet Mal alone in respect of the gold ornaments recovered from his premises. The department was tentatively, therefore, of the view that he was the owner of the gold. Later on, however, on adjudication the adjudicating authority has come to a definite conclusion and has also given relief to the appellant on the basis of appellant's own plea that the gold ornament is owned by different persons as set out above and after having accepted that plea of the appellant the learned adjudicating authority exonerated the appellant from the charge of non-declaration of the gold ornaments to the Gold Control authorities. The appellant cannot now turn back and say that the gold ornaments should be released to him as he is the presumed owner of those ornaments.
6. In fact proviso to Section 71(1) of the Gold Control Act lends support to my view which states that if certain gold has become liable to confiscation by an act or omission of a person to whom the gold does not belong, the gold should not be confiscated unless such an act or omission has been committed by that person with the knowledge or connivance of the person to whom the gold belongs. In other words, for example if gold is seized from a pawnbroker and he fails to declare or make an entry in records required to be maintained by him the gold becomes liable to confiscation, such gold cannot be confiscated and impliedly such gold will have to be released to its owner.
7. Even the authority cited in the case of 1983 ELT 687 appears to lend support to my view and contradicts the view of the learned advocate for the appellant. In that case a certain quantity of gold was recovered from one Ratanbai who expired during the course of proceedings. According to the Will of her pre-deceased husband, her grandsons were the owners of the said gold in the custody of Ratanbai and according to the 2nd proviso of Section 79 gold was to be returned to Ratanbai from whose possession the gold was recovered and consequently to her successor. Original petitioners before the High Court were grandsons of Ratanbai. Later on, however, successors of Ratanbai, namely son and daughter of Ratanbai also applied for being impleaded as co-petitioners in their capacity as the heirs of Ratanbai. In this context the Hon'ble High Court has observed in para 67 of the aforesaid report as follows :-
"A small dilemma remains. If the matter is viewed under the proviso of the amended Sub-section (1) of Section 71, the gold ought to be returned to the owners, that is, the petitioners. But if the obligation under the second proviso of Section 70 is to be enforced, it has to be returned to Ratanbai. She died on 16th April, 1973. However, the problem is obviated by an application moved, just before the hearing commenced, by Nemkumar and Shantabai, to be impleaded as co-petitioners in their capacity as the heirs of Ratan-bai. The application has been opposed on the ground of delay, but, I think, having regard to the extreme intricacy of the law and the possibility of misunderstanding, that in the interests of justice the application ought to be allowed. Accordingly, Nemkumar and Shantabai will be deemed to have been added as petitioners. I was explicitly told that there is no conflict of interest between them and the original petitioners and order may be made in favour of any or all of them."
[Emphasis supplied by me].
It is to be observed that the Hon'ble High Court also felt a dilemma whether the gold is to be released to the heirs or Ratanbai in terms of Section 79 or to the owners of the gold in terms of proviso to Section 71(1). The matter was resolved there and the gold was ordered to be released by the High Court in the said case because there was no conflict of interest between the actual owners and the successors of Ratanbai. In the instant case, however, the position is different. There is a conflict of interest between Jeet Mal and his brother Prem Chand, the latter also claims a share out of the gold belonging to their mother and held to have been so by the adjudicating authority.
8. The question of ownership of confiscated goods can, however, be decided only by a Civil Count. The adjudicating authority under the Gold Control Act has no jurisdiction to determine the title to the goods. The finding of the adjudicating authority as to the title or to the owner of the goods would not be conclusive or binding on the real owner. For this, 1 rely upon the recent judgment of W.R.B. in the case of Mulchand Phoolchand Jain v. Collector of Customs, Bombay [1987 (13) ECR 101 -CEGAT-WRB]. Following is the observation of W.R.B. :-
"22. Since the order dated 7-6-1978 passed by the Govt. of India had been set aside by the High Court of Bombay as per the consent memo, it is not necessary for us to refer to the findings of the Govt. of India. With this, we will now proceed to consider the points that we had formulated earlier.
Point No. 1 :- At the outset, it is necessary to make it clear that the adjudication proceedings is a summary proceedings. Strictly speaking, the adjudicating authority has no jurisdiction to determine the title to the goods. The finding of the adjudicating authority as to the title or the ownership of the goods would not be conclusive or binding on the real owner. The proper authority to determine, the title to the property is the Civil Court. But then, if any person lays claim to the seized goods, the adjudicating authority gets jurisdiction to decide whether the claim is real or fanciful. This is because the event of the adjudicating authority holding that the goods seized are not liable to confiscation, the same shall have to be returned to its real owner or to the person from whom it was seized. The position, however, gets altered if the finding of the adjudicating authority is against the claimant. Such a claimant cannot question the legality of the order of confiscation of goods unless and until he establishes his right to the seized goods."
9. Authorities, namely 1962 AIR Tripura 50 deals with certain provisions of Foreign Exchange Regulation Act. Therefore, this has no application to the present provisions of the Gold Control Act. Similarly, the authority of Bombay High Court i.e. 1963 BOM. AIR 83 relates to provisions of Criminal Procedure Code. In the absence of any plea that the relevant provisions of Criminal Procedure Code are pari materia the provisions of the Gold Control Act, on this issue the said ruling cannot be applied. The third authority 1986 (25) ELT 57 though relating to Gold Control Act does not appear to support the appellant's case. In that case some excess gold was confiscated on recovery from the business premises of a gold dealer. It was claimed by the said gold dealer that the gold so recovered belonged to some other persons. The lower authorities, however, did not accept that claim of the gold dealer and termed it as an afterthought and thereupon confiscated the gold. On appeal before the Tribunal it was found that the excess gold did belong to the other persons as claimed by the gold dealer. The confiscation of the gold was, therefore, set aside on the ground that the other persons were not given the show cause notice. The order does not mention that to whom the gold should be released whether to the gold dealer or to the other persons. The Tribunal has merely set aside the order of the lower authorities with consequential relief to the appellant without specifically deciding the question whether the gold has to be released to the appellant (the gold dealer) or to the other persons, whose claim of ownership was accepted. Therefore, this authority is of no assistance to the learned advocate for the appellant here.
10. In view of my aforesaid discussion, the appeal is rejected.