Customs, Excise and Gold Tribunal - Delhi
Suresh Chand Agnihotri And Ors. vs Collector Of Central Excise And Ors. on 4 February, 1987
Equivalent citations: 1987(12)ECR995(TRI.-DELHI), 1987(29)ELT165(TRI-DEL)
ORDER D.C. Mandal, Member (T)
1. These two appeals and the cross-objection relate to the same case and as such, they have been taken up for hearing together and are being disposed of by this common order.
2. The facts of the case, in brief, are that on 20-11-1978, Officer of Customs Branch, Head Quarters Office of the Central Excise Collect-orate, Kanpur, searched the business premises of Shri Vijay Kumar at 54/5-A, Gola Nayaganj, Kanpur. On search of the premises, the Officers recovered 3 pieces of Gold Rawa of 24 Carrats purity, having marking TPG and M.S. Pure Gold Kanpur and a small piece of 17 Carrats purity along with a Dharam Kanta Parcha from the Gaddi of the ground floor portion of the shop. The recovered gold weighed 295.500 Cms. and was valued at Rs. 26,666/-. The gold was seized under Section 66 of the Gold (Control) Act, 1968 as Shri Vijay Kumar could not furnish any evidence in support of the lawful possession of the same. He, however, denied the ownership of the gold and stated that it might have been left by some one sitting on the ground floor of his business premises. He further stated that he was a silver refiner and had no dealings in gold. Subsequently, on 22-12-1978, S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri, residents of 133/134, M-Block, Kidwai Nagar, Kanpur, submitted an application claiming that the seized gold belonged to their father Shri Ram Jiwan Agnihotri who expired on 4/5-12-1978. They also stated that on 20-11-1978 their father had gone to the shop of Shri Vijay Kumar for refining silver ornaments and weighment of 5 pieces of gold weighing 25 tolas 5 mashas. They further stated that as soon as he gave silver ornaments for melting, some one sitting in the shop shouted that the Customs Officers had come and in the state of panic their father ran away from the shop premises leaving behind gold pieces in the shop of Shri Vijay Kumar. They stated that the said gold was recovered and seized by the Customs Officers. A show cause notice was issued to Shri Vijay Kumar to show cause as to why seized gold should not be confiscated under Section 71 of the Gold (Control) Act, and why penalty should not be imposed on him under Section 74 for contravention of the provisions of Section 8(1) of the Act. The case was adjudicated by the Additional Collector of Central Excise, Kanpur, and vide his order-in-original No. 5/ADL/ColIector/Gold/1981 dated 28-11-1981 he confiscated the seized gold absolutely under Section 71 for contravention of Section "(1) of the Act. He, however, gave benefit of doubt in favour of Shri Vijay Kumar in respect of the alleged possession, custody and control of the gold in question, and did not impose any penalty under Section 74 of the Act. The Additional Collector observed inter alia that there was no conclusive evidence on record that Shri Ram Jiwan Agnihotri was owner of the gold under seizure. Appeal was filed against the order of Additional Collector by S/Shri Mahesh. Chand Agnihotri and Suresh Chand Agnihotri. The Collector of Customs (Appeals), New Delhi, .modified the order of the Additional Collector and ordered for return of seized gold to the appellants on payment of redemption fine of Rs. 16,000/- on the ground that the Additional Collector of Central Excise had accepted that gold initially belonged to Shri Ram Jiwan Agnihotri, father of the appellants, and the appellants had filed succession certificate showing, that the two appellants inherited the properties of Shri Ram Jiwan Agnihotri. Against this order, appeals have been filed by the Revenue as well as S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri.
3. We have heard Shri Awasthi, learned advocate for S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri and Shri Shishir Kumar, learned S.D.R. for the Collector of Central Excise, Kanpur. The gists of the arguments of Shri Awasthi are as follows :-
(i) Appeal filed by the Collector of Central Excise is barred by limitation as it was filed after expiry of statutory period of three months. The appeal was filed by the Collector on 21-12-1984. In Column 3 of the appeal memorandum, the date of communication of the order-in-appeal was shown by the Collector as 24-9-1984. S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri received the impugned order on or about 31-8-1984, deposited the redemption fine on 13-9-1984 arid intimated the fact of depositing the redemption fine to the Collector on 18-9-1984. The Collector was also supposed to receive the impugned order on or about 31-8-1984. The date of 24-9-1984 shown by the Collector in his appeal is, therefore, incorrect.
(ii) Shri Vijay Kumar, from whose premises the gold was seized, denied the ownership of the gold. The seized gold belonged to Shri Ram Jiwan Agnihotri, who went to the shop of Shri Vijay Kumar for getting silver ornaments refined and left behind the gold there. Report of the commission set up the adjudicating officer shows that he got his silver refined in that shop on 20-11-78. S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri claimed the ownership of gold on 22-12-1978, There was no other claimant of the gold. Therefore, according to the provision of Section 79 of the Gold (Control) Act,' show cause notice should have been issued to them. In the absence of any show cause notice issued to them, confiscation of the gold became illegal. The decision of this Tribunal in the case of Dwarka Prasad v. Collector of Central Excise, Delhi, reported in 1985-ECR-2503 (CEGAT North Regional Bench) has been cited in support of this argument. S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri were aggrieved by the order of the Additional Collector. So, the Collector (Appeals) was correct in entertaining the appeal filed by them. He did not exceed his jurisdiction.
4. The arguments of Shri Shishir Kumar for the Collector were, in brief, as follows:-
(i) The order of the Collector (Appeals) was not received by the Collector of Central Excise, Kanpur. The copy of the order endorsed to the Additional Collector was received in his office on 24-9-1984. According to the provisions of Section 80-A(5) of the Act, copy of the order should come from the Collector (Appeals). Intimation to another officer of Central Excise is not communication to the Collector. Judgments of Allahabad High Court in the case of Additional Commissioner of Income Tax, Lucknow v. Prem Kumar Rastogi, 1980-(Vol. l24) I.T.R.-381 and of Andhra Pradesh High Court in Jayalakshmi Cloth Stores v. Income Tax Officer, Gudivada and Ors., 1981-(Vol. l32) I.T.R.-764 are relied upon, An affidavit of Shri Gurbax Singh, Additional Collector of Central Excise, Kanpur, has been filed in which it was affirmed that copy of the order-in-appeal No. 14-KNP/Gold/84 dated 27-7-1984 meant for the Collector of Central Excise, Kanpur was not received and action to file an appeal before this Tribunal was initiated on the basis of the copy of the order-in-appeal meant for the Additional Collector, which was received in the office of the Additional Collector on 24-9-1984. The appeal filed on 21-12-1984 was, therefore, within the statutory time limit.
(ii) In the case of Jeevan Lal K. Jain v. The Administrator, Gold Control, reported in 1985 (21) ELT 89, this Tribunal held that show cause notice was to be issued to the owner only after the adjudicating officer was satisfied that the gold liable to be confiscated belonged to person other than the one, from whom it was seized. The Gold (Control) Act does not make it obligatory on the part of the adjudicating officer to issue show cause notice before hearing the person from whom the goods were seized. In the present case, show cause notice was issued to Shri Vijay Kumar on 26-2-1979. Gold was seized from his shop premises on 20-11-1978. Shri Ram Jiwan Agnihotri expired on 4-12-1978. Between 20-11-1978 and 4-12-1978 he did not claim the ownership of the gold. His sons also did not claim the gold between 20-11-1978 and 21-12-1978. Shri Ram Jiwan Agnihotri was not the owner of the gold. Additional Collector did not accept that the gold initially belonged to Shri Ram Jiwan Agnihotri. Collector (Appeals) was wrong to hold that Additional Collector concluded that the gold belonged to Shri Ram Jiwan Agnihotri. He proceeded under a misconception. Show cause notice was not to be issued to S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri. However, they were heard by the Additional Collector, in view of the provision of Section 79 of the Gold (Control) Act, for the purpose of their representation. Even if it is considered that Shri Ram Jiwan Agnihotri was the owner, then also his sons could not explain how he acquired and possessed the primary gold. There is no provision in the Act for issue of show cause notice to the successors.
(iii) As Shri Ram Jiwan and his sons were not the owners of gold, they had no right to appeal and the Collector (Appeals) had no jurisdiction to entertain their appeal since they were not the persons aggrieved by the order-in-original passed by the Additional Collector.
(iv) The order of the Collector (Appeals) to release the gold to S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri on payment of redemption fine of Rs. 16,000/- was illegal, being contrary to the provision of Section 73 of the Act, as they were not the owners of the same. On facts and in law, the order-in-appeal is to be set aside.
5. Two contrary appeals have been filed by S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri and by the Collector of Central Excise against the same order-in-appeal. In the appeal filed by S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri, the main contention is that no show cause notice was issued to them as required under Section 79 of the Act and hence the order of confiscation of the seized gold was illegal and the gold should be released to them without redemption fine and the order-in-appeal should be set aside. The main ground of the appeal filed by the Collector is that the order of the Collector f Customs (Appeals) was illegal, being contrary to the provision of Section 73 of the Gold (Control) Act as Shri Ram Jiwan Agnihotri and his sons S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri were not the owners of gold, and that the Collector (Appeals) erred in holding that the Additional Collector had concluded that Shri Ram Jiwan Agnihotri was the owner of the gold. It is also stated in the appeal that gold was correctly confiscated absolutely by the Additional Collector. His order should be confirmed and the Collector (Appeals)'s order should be set aside. S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri have also filed a cross objection against the appeal filed by Collector and have prayed that the said appeal be rejected and the gold may be released to them without redemption fine.
6. On the question of limitation raised by the learned advocate, the Additional Collector of Central Excise, Kanpur has affirmed an affidavit in which he has stated that the copy of the Collector (Appeals)'s order-in-appeal meant for the Collector of Central Excise, Kanpur was not received by the Collector. The copy of the said order meant for the Additional Collector was received in the office Of the Additional Collector on 24-9-1984 and action to file appeal before this Tribunal was initiated on the basis of that copy. The learned advocate has not produced any contrary evidence. His allegation is based on presumption. We have accepted the affidavit and in view of the affirmation made by the Additional Collector we hold that the appeal has been filed by the Collector within the statutory period of three months and the same is not barred by limitation. The Collector of Central Excise, Kanpur authorised the Additional Collector under Section 81-A(1) [81(3) ?] of the Gold (Control) Act to file the appeal and the same has been filed accordingly. The appeal is, therefore, legally valid.
7. As already held, by this Tribunal in the case of Jeevan Lal K. Jain, show cause notice is to be issued to the owner of the goods after the adjudicating officer is satisfied that the seized goods belong to a person other than the one from whom the goods were seized. In this case, show cause notice was issued to. Shri Vijay Kumar as he was presumed to be the owner of the gold under Section 99 of the Gold (Control) Act. Although S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri claimed the gold, Show Cause Notice was not issued to them because the adjudicating officer was not satisfied about their ownership. They were, however, heard before the gold was confiscated. We do not, therefore, find force in the contention of the learned advocate that the confiscation was illegal. In our view, the seized gold was involved in the contravention of Section 8(1) of the Act and its confiscation under Section 71 was correct in law.
8. While ordering release of the gold to S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri, the Collector of Customs (Appeals) has observed that the Additional Collector accepted that the gold initially belonged to their father Shri Ram Jiwan Agnihotri. This conclusion of the Collector (Appeals) is not supported by the findings of the Additional Collector and is based on misconception. In the second paragraph of his findings the Additional Collector has categorically observed that there is no conclusive evidence on record that Shri Ram Jiwan Agnihotri was the owner of the gold under seizure. This finding is further supported by his observations in the following portion of the same paragraph:-
"Even if it is accepted that late Shri Ram Jiwan Agnihotri had thrown the primary gold under seizure in panic and had run away from the shop of Shri Vijay Kumar, it was for him to make a claim about it immediately after 20-11-1978, the date on which the seizure was made. Shri Ram Jiwan Agnihotri expired on 4-12-1978. The claim could have been made immediately after the seizure. Accepting that late Shri Ram Jiwan Agnihotri was ill, an application could have been sent on his behalf by any of the persons who have come out with deposition concerning the ownership after his death. The first claim was made after more than a month of the seizure. It is not clear as to how, late Shri Ram Jiwan Agnihotri had taken the gold to the shop of Shri Vijay Kumar who is only a silver refiner and has stated that he had no dealings in gold. It does not appear to be normal for a person to carry gold to a silver refinery shop...."
We agree with the Additional Collector's observation in the above quotation. If Shri Ram Jiwan Agnihotri was the genuine owner of the gold, there was no reason why he remained silent and did not claim the gold. There is also no reason why his sons did not stake their claim till 22-12-1978 although he expired on 4-12-1978. The abnormal delay has not been explained satisfactorily with cogent reasons. We are not satisfied about the genuineness of the claim of the appellants. The affidavit of Shri Ramadhin Agnihotri appears to us to be an after thought. It also appears to us unusual that instead of telling his sons about the gold and asking them to go to Shri Vijay Kumar for bringing the "jhola" containing the gold, he told Shri Ramadhin and asked him to go to Shri Vijay Kumar for the purpose. We find considerable force in the Additional Collector's contention that the silence of Shri Ram Jiwan Agnihotri till his death and later by his sons clearly indicates that Shri Vijay Kumar and S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri were in collusion to lodge a belated claim for protecting Shri Vijay Kumar from penalty, whereas no penalty could be imposed on Shri Ram Jiwan as he was already dead. The appellants have not produced before us any evidence to prove that the seized gold really belonged to Shri Ram Jiwan Agnihotri. For the reasons already stated above we do not consider the affidavit and the deposition of Shri Ramadhin Agnihotri to be adequate evidence to establish the claim. In the circumstances, we hold the view that the ownership of the seized gold is not established.
9. Under Section 73 of the Gold (Control) Act, 1968, the adjudicating officer may give the owner of the confiscated gold an option to pay fine in lieu of confiscation. Thus, redemption fine can be imposed if the ownership of the gold is established. In the present case, ownership is not established. As a result, the Collector (Appeals)'s order to release the seized gold on payment of fine is contrary to the provision of Section 73 of the Act. As the impugned order is not according to the provision of law, it has to be set aside and the order of the Additional Collector restored. We order accordingly. Consequently, the appeal filed by the Collector of Central Excise is allowed and the appeal and cross objection filed by S/Shri Suresh Chand Agnihotri and Mahesh Chand Agnihotri are dismissed.
10. The redemption fine of Rs. 16,000/- already deposited by the appellants in terms of the impugned order should be refuned to them forthwith.