S CHAMPALAL Vs. COLLECTOR OF CENTRAL EXCISE
LAWS(CE)-1986-9-5
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on September 12,1986

Appellant
VERSUS
Respondents

JUDGEMENT

S. Kalyanam Member (J) - (1.)THIS appeal is directed against the order of the Collector of Central Excise, Bangalore dated 5-5-1986 imposing a fine of Rs. 12,500/-under Section 73 of the Act in lieu of confiscation of 699.500 gms. of gold ornaments not declared by the appellant besides penalty of Rs. 2,500/-under Section 74 of the Gold (Control) Act, 1968 (hereinafter referred to as the Act). The Officers of the D.R.I. Zonal Unit, Bangalore, visited the residence of the appellant on 8-8-1985 and found ornaments totally weighing 4699.500 gms. of 20-22 ct. purity. The authorities on a reasonable belief that the entire 4699.500 gms of ornaments were in the possession of the appellant and being over and above the statutory exempted limit of 4,000 gms, namely 699.500 gms and not declared, seized the same under mahazar as per law and the further proceedings instituted after investigation against the appellant resulted in the present impugned order now appealed against.
(2.)Shri Jeshtmal, the learned counsel for the appellant submitted that under Section 16(5) of the Act a family would be entitled to hold ornaments upto 4000 gms. without any statutory obligation to make declaration and the "family" has also been defined under the Act under Section 16(6) as
(i) the husband, wife and one or more minor children, or (ii) any two or more of them.

It was urged that the appellant Champalal had a major son and his wife living in the same house and inasmuch as the major son of the appellant and his wife would constitute a separate family by themselves within the meaning of Section 16(6) of the Act they would be entitled to possess separately 4000 gms - and considerable portion of the ornaments belonged to major son's family - and the reasoning of the adjudicating authority under the impugned order clubbing the appellant's family and the family of the appellants major son was assailed as legally incorrect. The learned counsel also placed reliance on the Wealth Tax Return filed by the parties which would indicate that the appellant and his major son did not constitute members of an undivided Hindu Joint family.

Shri Vadivelu, the learned DR submitted that since there is no evidence on record to show that the major son of the appellant constituted a separate family and since the appellant as Kartha of undivided Hindu family was in overall control and custody of the entire quantity of ornaments under seizure non declaration of the excess quantity of 699.500 gms. would be a contravention under Section 16(1) of the Act.

(3.)I have considered the submissions of the parties herein. Under Section 16(1) read with Section 16(5) a family would be entitled to hold and possess 4000 gms without any declaration. The term family has been given a special statutory definition under the Act. It is stated that for the purpose of declaration under Section 16 "family" shall be deemed to consist of husband, wife and one or more minor children or any two or more of them but shall not be deemed to include any other person. The section is very specific that excepting the husband and wife and one or more minor children no other members found in a family would be deemed to be members of the family within the meaning of Section 16(6) of the Act. In such a situation the appellant's major son and his wife would undoubtedly constitute a separate family within the meaning of the expression under section 16(6) of the Act. Therefore family of the appellant and major son's family would be two different entities each and each of which would be entitled to possess 4000 gms. without being obliged under law to make any declaration thereof in terms of Section 16. I also find that the appellant and his major son have filed separate Wealth Tax Returns before the authorities and this would also prove that the appellant's major son was not a member of the Hindu undivided family of which the appellant is said to be a Kartha. Since the adjudicating authority has not taken this aspect into consideration and has held that the appellant would be under legal obligation to make a declaration by reason of the fact that he was the head of the family and that his major son was also living with him with his wife, the impugned has come to be passed. This reasoning of the adjudicating authority is contrary to the express provision of Section 16(6) of the Act and the special statutory definition for the family given therein. In this view of the matter I set aside the impugned order appealed against with consequential relief.


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