Customs, Excise and Gold Tribunal - Delhi
Popular Jewellers vs Collector Of Central Excise on 19 April, 1990
Equivalent citations: 1991(52)ELT399(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. This is an application under Section 81-A(2) of the Gold (Control) Act, 1968 for rectifying mistake apparent from the record in the Order-in-Appeal passed by the Tribunal in its Order No. A/2 to 9/87-NRB, dated 31-12-1986. In that order the Tribunal after considering the submissions made before it and the evidence on record inter alia confirmed the confiscation of five necklaces weighing 254 gms with an option to redeem the same on payment of redemption fine of Rs. 1000/- in lieu of confiscation. With respect to another quantity of ornaments weighing 438.300 gms, old ornaments weighing 13 gms and Suhan weighing 20 gms, the Tribunal modified the absolute confiscation ordered by the Collector of Central Excise, New Delhi in respect of that quantity of ornaments and gave the option to the applicants to redeem the same on payment of a redemption fine of Rs. 15,000/- in lieu of confiscation. The Tribunal also confirmed the penalty imposed under the Gold (Control) Act on the applicants. The present application for rectification of error has been made with reference to this portion of the order of the Tribunal. The prayer in the rectification application is that the Tribunal should rectify the mistake apparent on the face of the record by ordering the release of ornaments weighing 254 gms and 438.300 gms which were received from gold dealers of Bangalore and Amritsar respectively both being covered under the consignor's sale/issue vouchers in the light of the judgment of the Allahabad High Court in the case of CCE, Allahabad v. Lala Kashi Nath Jewellers, Para 18 thereof reported in AIR 1972 All. 231 at page 236 to 237. It is also prayed that the Tribunal should adjudge afresh redemption fine in lieu of confiscation of ornaments weighing 13 gms and Suhan weighing 20 gms. The further prayer is that the Tribunal should grant proper consequential relief of refund of Rs. 1000/- redemption fine already paid on ornaments weighing 254.0 gms after adjusting the amount of fine which may be adjudged in lieu of confiscation of 33 gms of ornaments and Suhan as stated above the remaining amount out of Rs.15,000/- redemption fine already paid in lieu of confiscation of 438.300 gms and 13 gms of ornaments and 20 gms of Suhan be ordered to be refunded.
2. The reasoning given by the Tribunal in its order in respect of these ornaments may conveniently be referred to at this stage. Para 9 of the Tribunal's order in this regard is reproduced below -
"9. The other contention of the learned counsel for the appellants that confiscation of the gold and gold ornaments recovered from the counter of the shop: of the appellants as detailed out in Annexure 'A' to the Panchnama under the provisions of the Gold (Control) Act was not justified in view of the fact that the jewellery weighing 254 gms. and jewellery weighing 438.300 gms. were received from Gold Dealers of Bangalore and Amritsar respectively against vouchers and the jewellery weighing 33 gms. was received from one customer of Churu (Rajasthan) out of which 20 gms. was melted and the said jewellery being bona fide should be released to the appellants M/s. Popular Jewellers. On this point he drew our attention to the impugned order to point out that the fact that 254 gms of jewellery was received from Bangalore was found as a fact by the Adjudicating Authority and therefore he confiscated the same with an option to redeem it on payment of Redemption Fine of Rs. 1000/- only. He further elaborated that it is admitted to the appellants that the said jewellery received from the customers could not be accounted for in the statutory records maintained under the Gold (Control) Act by the appellants for the reasons that their Accountant was not available at that time. For this lapse he submitted that the offence being of a technical nature the jewellery may be released and a nominal fine be imposed on the appellants. From the impugned order we observe that after the seizure, sale vouchers issued by the consignors that is to say, M/s. C. Krishniah Chetty and Sons, Bangalore and M/s. Krishan Lai & Sons, Amritsar in respect of the two consignments and affidavit of Shri Bachhawat in respect of the third consignment, that is to say, 33 gms were produced during the adjudication proceedings. However, the Adjudicating Authority after examining the said defence of the appellants held that a perusal of the statement given by Shri Karam Chand, Accountant of the appellants firm M/s. Popular Jewellers in cross-examination shows that the Accountant was maintaining only cash books and cash ledgers for the party and not gold control records and this very fact was corroborated by Shri Narinder Mohan Jain appellant in his statement dated 8-11-1978 in which he stated that the statutory gold records in forms G.S. 11 and G.S. 12 and the entries in the Sale and Purchase Books were always maintained by him or his brother Rajinder Kumar. Further the Adjudicating Authority has also found that the appellants had not issued purchase voucher/receipt voucher in respect of the said three consignments, an obligation enjoined upon them under the Act. The Adjudicating Authority has also concluded that the fact that the gold jewellery received from one customer of Churu, that is to say Shri Bachhawat, was put to process without entering the same in the gold control registers or in the receipt/purchase vouchers further reinforces the conclusion that the deal was not genuine. He further lends assurance to this conclusion by observing that the failure by the defence to explain as to why only 20 gms. of gold Ornaments were converted into primary gold by melting when all the 33 gms. of old gold ornaments were required to be converted into new jewellery. We do not find any reason to differ from this finding. It is true that the affidavit of the said Bachhawat is on the record but the very narration of the facts in the affidavit does not inspire confidence and the reason for delay in filing the affidavit is not convincing. Since it is admitted to the appellants that the aforesaid gold ornaments were not accounted for in the statutory records maintained under the Gold (Control) Act, the contravention of the provisions of the Gold (Control) Act, 1968 as found by the Adjudicating Authority stands proved. However, from the record we find that there is nothing to prove that the gold ornaments recovered from the counter of the appellant's shop as detailed out in Annexure 'A' to the Panchnama were manufactured out of the smuggled gold. We feel that confiscation of the same absolutely would be harsh and the release of the same on payment of Redemption Fine of Rs. 15,0007/- in lieu of confiscation would meet the ends of justice."
3. Shri C.L. Choudhary, learned counsel for the applicants submitted that, in _ the first place he would urge that in a case like this the rectification of an apparent error by the Tribunal would not amount to a review of its own order. He cited the case law reported in 38 ITR 1 in Mangat Ram Kuthiala v. Commissioner of Income Tax cited in Smt. Prativa Rani Samanta v. Collector, Central Excise, Calcutta reported in 1986 (15) ELT 482 wherein the court observed that it is settled rule that a Judicial Tribunal can recall and quash its own order and if an order has-been obtained from or has been made by a Judicial or a quasi-Judicial Tribunal because of palpable mistake it has inherent power to recall such an order and make an order on merits and according to law in the ends of justice. The learned counsel also referred to the case of Jagdambika Pratap v. I.T.O. - 76 I.T.R. 619 that the Tribunal has inherent jurisdiction to rectify a wrong committed by itself when that wrong causes prejudice to an innocent party and the learned counsel also referred to the settled position that the inherent power to rectify a wrong committed by itself is not really speaking a power to review. Thereafter, the learned counsel proceeded to urge that in the instant case also the learned Collector of Central Excise, New Delhi as well as the Tribunal inadvertently passed orders with regard to the gold ornaments received from licensed gold dealers of Bangalore as well as Amritsar under valid vouchers issued by the consignors, omitting to consider the applicability of Para 18 of the Allahabad High Court judgment in the case of Collector of Central Excise Allahabad v. L. Kashinath Jewellers - AIR 1972 All. 231, although specific reference was made to the said Para 18 before the learned Collector of Central Excise in adjudication proceedings, as well as before this Tribunal in the grounds of appeal. The learned counsel pointed out that in spite of the fact that both these transactions were established to be genuine as per the investigation reports received from the Customs Authorities of Bangalore and Amritsar in response to the enquiries made through them by the Asstt. Collector, New Delhi, the learned Collector of Central Excise, New Delhi confiscated r both these consignments. The Collector ordered confiscation of ornaments weighing 254 gms received from Bangalore with an option to redeem the same on payment of Rs. 1,000/- and ordered absolute confiscation of 438.300 gms ornaments received from Amritsar. Before the Tribunal in their appeal at ground No. 4 of the appeal memorandum it was pleaded that in view of the Allahabad High Court judgment in Kashinath Jewellers case the gold ornaments being covered by the consignor's issue voucher could not be confiscated under the Gold (Control) Act, 1968. Although the Tribunal modified the order of absolute confiscation of 438.300 gms of gold ornaments and another quantity of 33 gms of gold with redemption fine of Rs. 15,000/-, the Tribunal in its decision did not consider the ratio of Para 18 of the Allahabad High Court judgment regarding conxfiscability of the ornaments which were covered by valid vouchers. This, according to the learned, counsel, is a mistake apparent on the face of the record. The learned counsel further referred to the decision of the Tribunal in the case of Kailash Jewellery House v. Collector of Central Excise, Order No. 182/85-NRB, dated 23-5-1985 where gold ornaments weighing 3549.500 gms covered by vouchers were found not accounted in statutory stock account register and were as such confiscated by the Adjudicating Authority. But in that case the Tribunal after discussing the evidence held that the confiscation of ornaments be set aside as the vouchers produced go to show that the purchase/acquisition had been verified and was found to be correct. The learned counsel urged that the position of the present applicants was exactly the same as the vouchers relating to ornaments received from Bangalore and Amritsar on verification were found to be genuine. He further cited the Tribunal's order in the case of Bharat Art Jewellers in A.No. GC(Del)/77/85-NRB wherein also the Tribunal had set aside the order of confiscation of gold and gold ornaments as the same were admittedly covered by vouchers and the transaction stood duly established and that the time lag for not making the necessary entries in the statutory dealer's accounts was not even a day but was in hours only. The counsel submitted that in the present case also the gold ornaments have been established to be covered by the vouchers and there is no allegation that the applicants had disposed of the gold in a clandestine manner or that the gold ornaments was smuggled gold, and there was also the explanation that the gold ornaments could not be immediately entered in statutory records because the only partner present in the shop was busy who would have made receipt entries in his accounts before closing the shop. The gold ornaments were also received in the shop on 7-11-1978 in the afternoon and in the evening officers had visited the premises for search and seizure. The learned counsel further relied upon the case of Asstt. Collector of Central Excise v. CD. George, 1988 (16) ECR 340 (Kerala) wherein the Kerala High Court held that gold received the same day and to be entered into accounts of the day cannot be proceeded against. In the circumstances, it was earnestly pleaded by the learned counsel that the rectification of the apparent error as prayed for should be ordered.
4. Smt. Dolly Saxena, learned SDR furnished the enquiry report regarding the two vouchers which were required for perusal by the Bench and submitted that the vouchers on enquiry at the source with the Central Excise authorities at Bangalore and Amritsar had been found to be genuine. Further she contended that the present application, in Department's view, is in effect for reopening of the case and for modification of the findings already given by the Tribunal in relation to the two quantities of ornaments ordered to be confiscated, and any such modification, in the department's view, will amount to a review of the earlier order of the Tribunal, for which it has no powers. The error, according to the SDR, which the applicants say exists in the Tribunal's order, is not one apparent on the face of the record, and only such errors can be rectified. The applicants cannot utilise the rectification application to argue their case afresh before the Tribunal.
5. We have given careful consideration to the submissions made by the learned counsel and the learned SDR. In our view the issue will have to be decided by ascertaining whether the Tribunal had omitted to consider submissions made before it in regard to the confiscability or otherwise of the two quantities of gold ornaments said to have been received from dealers at Bangalore and Amritsar. The applicants say that in respect of confiscation of this quantity of gold they had contended consistently before the Collector during the adjudication proceedings, as well as before the Tribunal, that the ratio contained in Para 18 of the Allahabad High Court in L. Kashinath Jewellers case would apply, and in the light thereof where it was merely a case of non-accounting the gold by a dealer of ornaments which were covered by a valid voucher there could be no seizure of the gold or its confiscation. On a perusal of the appeal filed before the Tribunal we find that the appellants have submitted ground No. 4 as follows:-
"IV. FOR THAT the Collector of Central Excise in his adjudication order should have held that ornaments covered by two sale transactions of the Bangalore and Amritsar firms could not be confiscated since each of the transactions was properly covered by documents, merely because of the formality of not making an entry of the said transaction in the firm's GS 12 Register, following the Allahabad High Court Judgment in the case of Collector, Central Excise v. Kashi Nath (AIR 1972 All. page 231)."
The Allahabad High Court in the case law relied upon had clearly held that in cases where the ornaments received by a dealer are covered by valid vouchers, mere failure of not posting it in the statutory accounts immediately, should not attract penal provisions of confiscation. In the present case even at the stage of adjudication there was no finding by the Collector that the vouchers produced were not genuine. We have subsequently also seen the verification report from the Central Excise authorities in response to queries from the Delhi Collectorate which shows that the vouchers were genuine and hence transaction relating to two quantities of gold has to be accepted as having been satisfactorily established. In this context, a perusal of the Tribunal's finding at Para 9 of its Order-in-Appeal extracted supra would show that there is no specific observation by the Tribunal on this aspect in terms and in the light of the ratio of the Allahabad High Court judgment relied upon by the appellants. Had this been properly focused before the Tribunal it was possible that such omission would not have occurred, which, in our view, was important, because of the decision to confirm the order of confiscation of the gold ornaments in this case. Further, as has been brought out in the counsel's arguments, in such a case where there is a clear omission on the part of the Tribunal to consider the contentions on certain aspects of the case before it, rectification thereof would not amount to review of its own order, and, on the other hand, such rectification would be within the inherent jurisdiction of the Tribunal and in the interests of justice. That in such cases the Tribunal has sought to rectify the apparent mistake in its order is also borne out by Tribunal's decisions reported in 1989 (23) ECR 544 Indian Airlines v. Collector of Central Excise, and also 1989 (22) ECR 28 (Cegat NRB) in the case of Shri Bhim Sain v. Collector of Customs, Chandigarh - 1989 (41) ELT 439 (Tri.). Moreover, the counsel has also cited before us decision of the Kerala High Court in the case of Asstt. Collector of Central Excise v. C.D. George, as also this Tribunal's own decisions, to show that where a dealer has proved receipt of ornaments under valid vouchers, the non-accountal thereof immediately before the end of the day had not been viewed grave enough an offence to warrant confiscation of the gold. We note that in the present case it is not denied that the vouchers relating to the gold received from Bangalore and Amritsar dealers were found on an enquiry to be genuine, and that these were received in the afternoon of the same day on which the visit and search of the premises took place by the officers which was in the evening of the same day.
6. Therefore, on consideration of the submissions made and perusal of the records, we hold that there is justification to rectify the error apparent in the Tribunal's order in A. No. A/2 to 9/87-NRB, dated 31-12-1986 and accordingly we pass the following order in partial rectification of Para 9 of the Tribunal's order -
"In view of the fact, that the vouchers for the ornaments weighing 254 gms and 438.300 gms received from M/s. C. Krishniah Chetty and Sons, Bangalore and M/s. Krishan Lal & Sons, Amritsar have been got verified by the department from the Central Excise Authority at Bangalore and at Amritsar and these vouchers having been ascertained on such verification to be genuine, we are of the view that the genuineness of the transaction thereby stands established and the non-entry of the quantity in the statutory accounts of the dealer lat the receiving end immediately on receipt will not justify the confiscation of these ornaments covered by valid vouchers although the dealer will still be liable for a personal penalty for the offence of non-accountal. In coming to this view, we bear in mind the ratio of the Allahabad High Court decision in the case of Lala Kashinath Jewellers - AIR 1972 All. 231 at Para 18 thereof to the effect that where ornaments received by a dealer are covered by valid vouchers, mere failure to enter the receipt immediately in the statutory dealer's accounts should not attract penal provision of confiscation. We also in coming to this view bear in mind the circumstances that these two quantities of ornaments have been received covered under valid vouchers in the afternoon of 7-11-1978 whereas the seizure took place the same evening, and hence the ratio of the decision of High Court would apply to the facts of this case. In the circumstances, in rectification of the Order No. cited above, we order that the confiscation of 254 gms and 438.300 gms of gold ornaments be set aside. At the same time in respect of the quantity of ornaments weighing 13 gms and Suhan weighing 20 gms (total 33 gms) the order of confiscation is maintained for the reasons already stated in Para 9 of the order dated 31-12-1986. However, the option to release that quantity on payment of fine in lieu of confiscation is maintained and the fine in lieu of the confiscation in respect of this quantity, namely, 33 gms as stated above is fixed at Rs. 5,000/- (Rupees Five Thousand only)."
The Tribunal's order is rectified only to the 'extent indicated above. The Rectification - Application is disposed of in the above terms.