M.C.Agarwal, J. - (1.) This is a reference under Section 82B of the Gold (Control) Act, 1968 made by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi at the instance of the applicant M/s Hazari Lal Gauri Shanker, the following question stated to be of law and to arise out of the Tribunal's order dated 29th of July, 1983 passed in Appeal No. GC (Del)(T) A.No. 32/82-NRB has been referred for the decision of this Court: Whether in the facts and circumstances of the case and on a true construction of Sections 71 & 79 of the Act, the failure to give show cause notices to the persons claiming ownership of the new gold ornaments had vitiated the order relating to their confiscation.
(2.) The facts of the case are that the applicant was a partnership firm with Sri Gauri Shanker and his son Krishna Gopal as its partners. The business premises of the applicant were searched by the authorities under the Gold Control Act on 29th of March, 1980 and from an iron safe installed in the room adjacent to connected with the shop, 275 pieces of new gold ornaments weighing 1092.400 gms. and 20.900 gms. of old gold were found and seized as unaccounted gold in terms of Section 66 of the Act. Both the aforesaid persons were present at the time of search and seizure and Krishna Gopal had at that time stated that the said property belonged to the firm and that new ornaments had been prepared by the goldsmiths. It was also admitted that the aforesaid articles were not entered in his books because the goods were received by his brother Inder Gopal. Regarding the old gold weighing 20.900 gms. it was pleaded that the same belonged to a relative Jagdish Chand. This part of the claim was later admitted and the articles were released in favour of Jagdish Chand. As regards the new gold ornaments, the adjudicating officer i.e. the Collector, Central Excise, Kanpur found that the goods belonged to M/s Hazari Lal Gauri Shanker and there was contravention of the provisions of Section 8(2) of the Gold (Control) Act and Section 36 of the Act read with Rule 13 and Section 55 of the Act. The Collector, therefore, ordered the goods to be confiscated with an option to the owner to redeem the same on a fine of Rs. 50,000. A penalty of Rs. 25,000 was also imposed on M/s Hazari Lal Gauri Shanker under Section 74 of the Act. The applicant preferred an appeal to the Tribunal which was allowed only to the extent that the penalty was reduced to Rs. 10,000. In other respect, the appeal was dismissed. During the proceedings the applicant had set up a case that the new Gold ornaments belonged to several persons who had got them manufactured by getting their old ornaments converted and they were lying with the applicant only by way of "amanat". This contention was not accepted at any stage of the proceeding. It is out of the aforesaid order of the Tribunal that the question, as reproduced above, has been referred for the opinion of this Court.
(3.) We have heard Sri Janardan Sahai, learned Counsel for the applicant and Sri Surya Prakash, learned Counsel for the opposite party.;