S.Kalyanam, - (1.)SINCE both the appeals arise out of a common order of adjudication and relate to one transaction and are interconnected, they are consolidated together and disposed of by a single order. The appeals are directed against the order of the Collector of Central Excise (Appeals), Madras, referred to supra, confirming the order of the Deputy Collector of Central Excise and Customs, Trichy, dated 20-11-84 imposing a fine of Rs. 16.300/- under Section 73 in lieu of confiscation of 168.250 gms. of primary gold and 318.300 gms. of gold ornaments, besides a penalty of Rs. 5,000/- each on the appellants under Sections 74 and 75 of the Gold (Control) Act, 1968, hereinafter referred to as the Act.
(2.)Officers of the Central Excise Intelligence Unit, Trichy, on 25-2-1984 searched the business premises of the appellants who are licensed gold dealers at 165, Big Bazaar Street, Trichy, and noticed primary gold and gold ornaments weighing 149.600 gms., valued at Rs. 23.790/- not accounted for in the statutory accounts. The Officers also detected a secret door in the shop connecting the residential premises of appellant Venugopal, one of the partners and a search of the residential premises of Venugopal resulted in the detection of primary gold and gold ornaments weighing 337.450 gms., valued at Rs. 60,741/-, in excess of the declaration furnished by him under the Act. The unaccounted gold and ornaments in the business premises as well as in the residence were seized under mahazar attested by witnesses as per law. Appellant Venugopal on 25-2-1984 gave a statement before the authorities that the gold and ornaments under seizure were not properly accounted for as per the Act and he would not be able to give any explanation for the excess of gold and ornaments in the shop as well as in his residence, as his brother appellant Jayakumar was looking after the partnership business. Appellant Venugopal further admitted that he had signed the purchase vouchers on 11th and 13th February, 1984 as well as the issue for manufacture bill book from 22-2-1984 to 24-2-1984 under bill Nos. 1587 to 1593. It is in these circumstances, after further investigation and issue of show cause notice, proceedings were instituted against the appellants which ultimately culminated in the impugned order now appealed against.
The learned consultant for the appellants submits that 68.250 gms. of primary gold and 2.950 gms. of gold ornaments (lady ring) under seizure belong to one Rajagopal and in support of this plea the learned consultant placed reliance on a purchase voucher dated 25-2-1984 signed and verified by the Inspector of Central Intelligence Unit, one of the officers conducting the search, Trichy. It was urged that the said purchase voucher bearing No. 1433 mentions the name of Rajagopal and the ornaments entrusted by him which, according to the learned consultant, were melted for purposes of remaking ornaments resulting in primary gold weighing 68.250 gms. Regarding ornaments weighing 78.400 gms, it was urged that they belong to one Smt. Vathsala Victor, a teacher, who had entrusted the same for purposes of repair and polishing. It was submitted that in a petition dated 15-3-1984 appellant Jayakumar has not only clarified this position but also explained the circumstances in which the excess gold and ornaments were found in the shop and in the residence of his brother appellant Venugopal. The learned consultant placed reliance on the claim petition preferred by the owners relating to their respective ornaments viz. by Rajagopal dated 1-3-1984 and Smt. Vathsala Victor dated 28-2-1984. It was contended that in terms of Section 79 read with the proviso to Section 71, no order of confiscation shall be made unless the owner of the gold or ornaments is given a show cause notice and further if it is established that the gold or ornaments under seizure belongs to a third party who has nothing to do with any act of irregularity committed by a dealer, the same shall not be liable for confiscation and the impugned order was assailed as bad in law since no show cause notice was issued to the claimants viz. Rajagopal and Vathsala Victor. It was further contended that in the original order of adjudication the plea of the appellant as set out in the petition dated 15-3-1984 and referred to supra, has not been considered at all and as such the impugned order was assailed as bad in law for non-consideration of the points urged by the appellant. The learned consultant further contended that in respect of the gold and ornaments seized from the residence of appellant Venugopal, out of a total quantity of ...100 gms. of primary gold, 64,200 gms. was the resultant of melting family ornaments for making ornaments for the new born child and the balance of 35.800 gms. would represent accumulated remnants returned by goldsmiths on various occasions. Regarding the balance of 237.450 gms. of ornaments unaccounted, it was contended that they were returned by two goldsmiths Ramachandran and Muthukrishnan under voucher No. 1590 dated 25-2-1984 and 1589 dated 25-2-1984 and those ornaments were handed over to the appellant's mother by the said goldsmiths for the purpose of safe custody since appellant Jayakumar was away at Madrag and appellant Venugopal was laid up with ailment, and they were eventually to be accounted for during the course of the day. Finally it was urged that non-accountal in the facts and circumstances of the case would only be a technical breach not warranting imposition of fine or penalty.

(3.)THE learned DR contended that the plea of the appellant that certain quantity of primary gold is the resultant of melting the ornaments of one Rajagopal is not acceptable. He urged that the purchase voucher bearing bill No. 1433 relied upon by the appellant to prove the order placed by the said Rajagopal is not relatable to the quantity of excess claimed by the appellant to be the resultant of melting the ornaments given by Rajagopal. THE learned DR further urged that the purchase voucher merely mentions various ornaments and their weight and the appellants under law should make proper entries the moment they melt the ornaments for purposes of remaking ornaments and the absence of any such record, coupled with the discrepancy in the total weight, would discredit the very purchase voucher relied upon by the appellant. THE learned DR further submitted that in respect of the claim by Smt. Vathsala Victor, no such plea at all was putforth by appellant Venugopal in his earlier statement dated 25-2-1984 nor by any salesmen of whom one happens to be the very nephew of the appellants. He also contended that when the appellants claim that ornaments weighing 78.400 gms. belong to Vathsala Victor, it is for them to substantiate such a plea and merely because no show cause notice was specifically given either to the claimants or the plea of the appellants in respect of ownership of Rajagopal and Vathsala Victor was not specifically dealt with in the original order of adjudication, the order would not become bad since the appellants cannot be said to have suffered any prejudice, particularly having regard to the charges of non-accountal under Section 55 and non-declaration under Section 16 of the Act. Regarding the quantity of gold and ornaments found in excess and seized from the residence of appellant Venugopal, the learned DR submitted that the explanation that 237.450 gms. of ornaments were handed over by goldsmiths Ramachandran and Muthukrishnan is not tenable because they were neither accounted for in the statutory register as per law nor would receipt of such ornaments in the residential premises other than the place of business is permissible under the provisions of the Act. THE plea of the appellants regarding melting of family ornaments for making ornaments for a new born child was also assailed as incorrect and untenable as well as the plea regarding 35.800 gms. of primary gold bits.