Decided on October 01,1986



S.Kalyanam, - (1.)SINCE the above appeals arise out of a common order and relate to a single transaction, they are taken up together and disposed of by a common order. The appeals are directed against the order of the Collector of Central Excise (Appeals), Madras dated 2.6.1986 confirming the order of the Deputy Collector of Central Excise, Cochin dated 18.6.85 absolutely confiscating 22 gold coins (sovereigns) weighing 172 gms., besides a penalty of Rs. 1000/- imposed on appellant Govinda Rao under Section 74 of the Gold (Control) Act, 1968 (hereinafter referred to as the 'Act'). The first appellant, Govinda Rao, is the father and appellant Smt. Lalitha Prasad (No. 169/86) is the daughter and the other appellants are appellant Govinda Rao's sons.
(2.)On the basis of information received from the Chief Enforcement Officer, Directorate of Enfocement, Trivandrum, the Inspector of Central Excise, C.I.U., Cochin along with his party searched the residence of appellant Govinda Rao at door No. XXXV/1164, Diwan's Road, Cochin on 29.9.1983 at about 12.10 p.m. and recovered 22 gold sovereigns from the front room of the house. The authorities ascertained from appellant Govinda Rao that no declaration had been made in respect of the said 22 gold sovereigns totally weighing 172 gms. The authorities also found 835.000 gms. of gold ornaments in the possession of appellant Govida Rao. Since the gold coins were not declared by appellant Govinda Rao as per law, the authorities effected the seizure of the same under mahazar attested by witnesses. The purity of the gold sovereigns was ascertained as 22 ct. through Shri Muniappa Asari, a certified goldsmith. Appellant Govinda Rao gave a statement before the authorities on 29.9.1983 to the effect that the gold coins under seizure were received by him as gifts from his relatives and friends during his 60th birthday and during his children's marriage and that he did not give any declaration before the authorities under the Gold (Control) Act in respect of the same. It is in these circumstances, after further investigation, proceedings were instituted against the appellant which ultimately culminated in the present impugned order appealed against.
Shri K.M.R. Menon, the learned Counsel for the appellants submits that the gold coins were recovered from the residence of appellant Govinda Rao and the other appellants are the children of appellant Govinda Rao, namely his sons and daughter who also claimed ownership of the coins before the authorities. It was urged that under law in terms of Section 16(5)(b) of the Act if an individual owns or possesses both articles and ornaments not exceeding 4,000 gms., no declaration need be made and in the instant case even if Govinda Rao is held to be the individual owner of the coins under seizure, having regard to the fact that 835 gms. of gold ornaments were also found along with the coins, the coins are not liable to seizure and confiscation on the ground of non-declaration. The learned counsel, to substantiate his plea, placed reliance on the judgment of the Punjab and Haryana High Court in the case of Sahib Dayal and Asha Rani. v. Union of India and others - reported in 1983 ELT 75 (P&H). The learned Counsel also placed reliance on the Division Bench ruling of the Madras High Court reported in 1973 M.L.J. (1) 311 in the case of 3. A. Abdul Hamid v. Collector of Central Excise, Madras. Shri Menon also pressed into service the ruling of the North Regional Bench, CEGAT, New Delhi in the case of Smt. Lilawati Chhawachharia and another v. Collector of Central Excise & Customs, Jaipur, reported in 1983 ELT 1890 and also a CEGAT ruling of the West Regional Bench in the case of 'Abaji Nana Patil v. Gold Control Administrator - 1985 (21) E.L.T. 483 - Tribunal.

(3.)SHRI Vadivelu, the learned D.R. submitted that Section 16(5)(b) should be construed subject to the limitation prescribed under Section 16(5)(a) in respect of articles, which under the definition would include gold coins as well. It was urged that Section 16(5)(a) and (b) should be read in conjunction with each other and harmoniously and the limitation of 50 gms. prescribed under Section 16(5)(a) should be read into Section 16(5)(b), as otherwise the very intention of the Legislature under Section 16(5)(a) would stand defeated. The learned D.R. also urged that construing Section 16(5)(b) in isolation and independently of Section 16(5)(a) would render Section 16(5)(a) otiose; but with characteristic fairness the learned D.R. conceded that the ratio decidendi of the various rulings relied upon by the learned counsel for the appellants is to the effect that declaration in respect of articles and ornaments owned or possessed below 4,000 gms. by an individual is not necessary under law.

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