N. M. KASLIWAL, J. - (1.) THE facts leading to this writ petition under Article 226 of the Constitution of India in the matter of the Gold Control Act, 1968 are that on 30th May, 1974, in pursuance of an information, the Central Excise and Customs Preventive Party checked Delux Bus No. RRL 294 going from Ajmer to Jodhpur at the Octroi Post, Ajmer-Beawar Road Ajmer. THE petitioner was travelling in the said bus and was spotted out. He was alighted from the bus and was searched in the presence of two independent witnesses which resulted into recovery of 9 pieces of primary gold weighing 463. 430 Grams from the left pocket of pant of the petitioner. THE details of the 9 pieces recovered from the petitioner are given as below:- S. No. Marking on the pieces. Number of pieces. 1. Hiranand MM JPR 9950 4 (two big and 2 small ). 2.C M. Jain Ajmer fine gold 9950. 1 3.Fine Gold Ajmer 9950 1 4. 9950 2 5. B. D. Shankerlal K. L Ajmer 9950 1 Total 9 THE brief case of the petitioner was also searched and 6. 800 Kg of silver in small ingots bearing markings ' Ajmer" Saraf Sangh Kanta Chhap Asli Chandi and Refuse (Keeti) of silver weighing 259. 9 grams and 2 pieces of silver samples weighing 20 grams were also found besides the above mentioned gold and silver. Following documents were also recovered from the possession of the petitioner:- (1) Two tickets of Delux Bus from Ajmer to Jodhpur No. 820875 and 820876. (2) One receipt No. 11195 dated 30th May, 1974 of Dharam Kanta Ajmer. (3) One receipt No. 11215 dated 30th May, 1974 of Dharam Kanta Ajmer. (4) One Bill No. 5777 of Hotel Ratan dated 30th May, 1974. THE raiding party seized the gold under section 66 of the Gold Control Act and the silver under section 110 of the Customs Act, 1962 on a reasonable belief that the gold in question was being carried, possessed /controlled by the said petitioner Pannalal in contravention of section 8 of the Gold Control Act and the silver was in the process of export out of India. THE Raiding Party also seized the brief case and the pant used as containers for the silver and gold. THE documents mentioned above were also seized being relevant with the inquiry proceedings. A separate show cause notice for silver was issued under the Customs Act, 1962 with which I am not concerned in the present writ petition. In the statement dated 30th May, 1974 recorded on the spot, the petitioner deposed that he had brought nine gold ornaments of his wife and got them melted through some agent at Ajmer from unknown Refiners. He was taking the melted gold pieces to his village via Jodhpur. On this material, the Assistant Collector Central Excise, Ajmer issued a notice to show cause to the petitioner on Oct. 26, 1974, to explain to the Deputy Collector, Customs and Central Excise Jaipur within 10 days of the receipt of the memorandum as to why the seized gold should not be confiscated under section 71 of the Gold Control Act and why further penal action should not be taken against him under section 74 of the Gold Control Act. Shri Hiranand, B. D. Shankerlal and M. C. Jain were also called upon to show cause as to why penal action should not be taken against them as they had refined the gold in contravention of section 11 of the Gold Control Act.
(2.) IN reply to the show cause notice the petitioner submitted that his wife had given him old gold ornaments which were got malted by him at Ajmer for the manufacture of new ornaments. The seized 9 pieces of gold were the out come of the old ornaments owned by his wife and were in the process of manufacture of new ornaments. That no notice had been given to his wife who was the owner of those ornaments. The seized gold pieces were not liable to confiscation as the omission had been committed by him without her knowledge. He pleaded ignorance of law and requested for a lenient view. He also requested for personal hearing. As a follow up action Sarv Shri Shankerlal, Ramlal of M/s Manmal Manakchand and Hiranand, all Refiners were also contacted by the Seizing Officers and their statement were also recorded. The above mentioned refiners took the stand that the markings found on the pieces of gold had no connection with them The gold was not refined by them and they had no concern with the gold seized from the petitioner. The learned Deputy Collector Central Excise and Custom Jaipur after taking into consideration the entire record and the submissions made by the parties at the time of investigation, and replies to the show cause notice and submissions made daring the course of personal hearing, held that the stand taken by the petitioner that he got melted the gold ornaments of his wife through a Dalai was false. According to the learned Deputy Collector the petitioner failed to produce the alleged Dalai for obvious reasons. No man parts with his valuable to an unknown person and the petitioner possibly failed to produce the Dalai because of the fact that he did not get gold ornaments of his wife melted, but on the other hand acquired and possessed the primary gold in question through the alleged Dalai who had not come forward having abated the petitioner in acquiring of impugned primary gold other than by lawful means. The learned Deputy Collector also observed that Mohanlal, the father of the petitioner was a certified goldsmith with certificate No. 192 and it was specifically stated by the petitioner in his voluntary statement dated 30th May, 1974 that he had also been working with his father on a shop for the last 2-3 years in manufacturing gold and silver ornaments. Sub-section (3) of section 55 of the Gold Control Act laid down that no gold smith shall either own or have in his possession, custody or control any gold which had not been included in the statutory accounts. It was, therefore, required of them to have entered alleged 9 gold ornaments of the wife of the petitioner in the statutory Register (GS 13) but the same was not done obviously because the alleged gold ornaments were not carried from Sadri to Ajmer for melting. The impugned primary gold was acquired illicitly. The learned Deputy Collector also found that the defence had failed to adduce the evidence of the wife of the petitioner besides having failed to produce the Dalai of Ajmer who got the alleged gold ornaments melted. IN the absence of this vital link having been proved by the defence, it was extremely difficult to place any reliance on the defence. He further observed that on the other hand, the weight of the seized gold was 463. 430 grams which was quite near to the weight of 4 biscuits of gold i. e. 40 Tolas. There is very nominal difference of 2. 17 grams which can be termed as melting loss. It can be said that the petitioner purchase 4 biscuits of gold weighing 40 Tolas and got them melted to destroy material evidence. IN view of the above finding the Deputy Collector held that the petitioner had contravened the provisions of section 8 (1) of the Gold Control Act. The seized gold was thus liable to confiscation under section 71 and the petitioner was liable to penal action under section 74. The Deputy Collector thus vide his order dated 20th July, 1976 Annexure 1 ordered absolute confiscation of 9 pieces of primary gold weighing 463. 430 Grams under section 71 of the Gold Control Act and also imposed a penalty of Rs. 1000/- on the petitioner under section 74 of the said Act. Shri Hiranand Shankerlal and Manakchand were let off since no case had been established against any one of them. The petitioner aggrieved against the order of the Deputy Collector (Annexure 1) filed an appeal which came up for consideration before the Collector Control Excise Jaipur. Before the Collector, the petitioner also filed affidavits of Smt. Fency Kumari (wife of the petitioner) the alleged owner of the gold ornaments, Shri Mohanlal father of the petitioner and also of Shri Kripa-Ram, the brother-in-law of the petitioner. The grounds urged by the petitioner before the learned Collector were that at the time of seizure itself the petitioner had explained that his father was a certified gold smith and the petitioner was assisting him and the gold involved represented the melted and refined gold out of the ornaments of his wife who was in the capacity of a customer and the Adjudicating Officer ignored these facts and without issuing notice to the real owner of the gold erroneously ordered confiscation of the impugned gold The impugned gold was got refined by certain well known Refiners of Ajmer who embossed their marks on the said gold but they were let off and the petitioner was punished erroneously. The Department had failed to prove the case against the petitioner and the inference drawn by the Adjudicating Officer that the impugned gold represented the gold of 4 biscuits of foreign gold remained absolutely unsubstantiated That for technical offence of not entering the gold in the Register, its absolute confiscation besides penalty of Rs. 1000/- was too harsh. The appeal was fixed at Jodhpur far personal hearing on 21 7 1981 No appearance was made from the side of the petitioner. Instead a written brief (dated 19. 7. 78 was received from the petitioner with a request that the case may be decided on the basis of arguments made in the memo of appeal. The learned Collector having carefully gone through the memo of appeal and the written submissions filed before him and the connected case records upheld the order of the Deputy Collector and dismissed the appeal by his order dated 15th Nov. 1978 (Annexure 2 ). The learned Collector also observed that the plea of the petitioner that these 9 pieces of primary gold were melted and refined at Ajmer out of old ornaments belonging to his wife had not been proved by any evidence. Such plea taken by the petitioner was not corroborated by any entry in the statutory record required to be maintained under section 55 of the Gold Control Act although such a record was actually maintained by the father of the petitioner. The Dalai, who according to the petitioner, had procured the primary gold was neither named nor produced by the petitioner. The Refiners Sarv Shri Hiranand, Shankerlal and M. C. Jain had categorically denied having melted and refined any gold ornaments produced by the petitioner. All these facts were sufficient to prove that the petitioner had been in possession of primary gold in contravention of section 8 (1) of the Gold Control Act. The plea of the petitioner that since no notice was given to the wife of the petitioner, the goods could not be confiscated was rejected for the reason that it had never been established that the petitioner had actually brought his wife's ornaments for melting and refining. The ownership of the wife of the petitioner was not established and, therefore, the primary gold was rightly treated as owned and possessed by the petitioner in whose possession it was found. The learned Collector in these circumstances observed that it was not necessary to labour the point whether the 9 pieces of primary gold were smuggled or not. As there was no dispute about the fact that 9 pieces of gold were primary gold and found in the possession of the petitioner, he had contravened section 8 (1) of the Gold Control Act. It was also observed that it was a common knowledge that while re-manufacturing the ornaments no hall marks are embossed on the primary gold obtained in the process but on the other hand the same are generally put on primary gold illicitly obtained. The petitioner then filed a revision before the Central Government. The Additional Secretary to the Government of India Ministry of Finance Department of Revenue vide order dated 31st March, 1980 (Annexure 3) also found no reason to interfere with the order in appeal passed by the Collector. He found that the order of the Collector was correct in law and based on facts. The learned Additional Secretary in his Order (Annexure 3) also observed that both the persons, | namely. Sarv Shri Pannalal (petitioner) and Kriparam Soni stated that they did not know the name and address of the Dalai but they can identify him if he is brought before them. Therefore, it was not possible for the Seizing Officer to know who was the Dalai and there was no clue to trace him out. They, however, searched the premises of the persons whose seals were embossed on the gold seized pieces but they could not get anything incriminating. Each of these Refiners of silver denied having refined any gold or having received any ornaments through Shri Pannalal. The learned Additional Secretary also took into consideration that the writings on the reverse of the weighment slip of gold were as under:- 34-4-4. 25 34-4-4. 25 5-6-2. 25 5-6-2. 25 594 4 0-0-3. 5 23760 39-11-4 160-12 292 12-6-0 304-6-0 The writing on the duplicate copy of Dharam Kanta Receipt of Gold. 34-4-425 5940 5-6-2. 5 4 A 0-0-3. 5 X 23760 39-11-4 25 159-5 B 37-2 23500 11 C 4 Y 148-8 10-13 159-5 Z The learned Additional Secretary then observed as under:- "the statement of S/shri Pannalal and Kriparam were recorded at the time of seizure. Government observed that writing on the back of Dharamkanta receipt is calculation for the value of the gold seized. 'x' above denotes the total weight of seized gold. 'y' represents the value to be deducted from the value of 4 gold biscuits for arriving at the value of the seized gold. 'z' represents the melting charges for reduction in purity of biscuit to that of seized gold. 'a' represents the value of 4 biscuits. 'b' represents the deduction made from the value of four biscuits for arriving at the value of seized gold. 'c' represents the value of seized gold. This account is not connected with silver. Thus charge is clearly established. The failure to name the Dalai through whom the melting was done and the presumption raised by a reading of the writings in the paper the purity of gold near to 999 would strongly indicate to the smuggled nature. Thus, the order passed by the Collector is correct in law and based on facts. Government therefore see no reason to interfere with the order-in-appeal passed by the Collector and reject the revision application accordingly. "
(3.) THE petitioner in the aforesaid circumstances has filed the present writ petition and has prayed to quash the order Annexures 2 and 3 and to give a direction to the non-peti (ioners to release the gold seized from the petitioner. It was contended by Mr. Maheshwari learned counsel for the petitioner that though a similar explanation was given by the petitioner for the silver seized from the possession of the petitioner, but the silver has been released and the gold recovered from the possession of the petitioner has been confiscated without any valid reason. I, however, see no force in this contention. The provisions of the Customs Act applied with respect to the silver seized from the possession of the petitioner, while the gold has been confiscated under the provisions of the Gold Control Act. The petitioner has been found to be in possession of primary gold in contravention of section 8 (1) of the Gold Control Act and it has nothing to do with the provisions of the Customs Act. It was next contended that the Deputy Collector in his order Annexure 1 had found that the seized gold was 463. 430 grams to the weight of 4 biscuIts of gold i. e. 40 Tolas. There was very nominal difference of 2. 17 grams which could be termed as melting loss. It is contended that the loss of 2 17 prams cannot be considered as a nominal loss and in any case such gold of the quantIty of 2. 17 grams must have been found in the possession of the petItioner. It is also submItted that there was nothing unnatural in not disclosing the name and identIty of the Dalai as the petItioner was not knowing him and no adverse inference should have been drawn against the petItioner for not producing the Dalai. It is also argued that the Collector in his order Annexure 2 did not affirm the finding of the Deputy Collector that the petItioner had purchased 4 biscuIts of gold and got them melted to destroy material evidence. The Collector in this regard took the view that It was not necessary to labour the point whether the 9 pieces of primary gold were smuggled or not, in as much as there was no dispute about the fact that the 9 pieces of gold which were primary gold were found in the possession of the petItioner and, therefore, the petItioner had contravened section 8 (1) of the Gold Control Act. It is submItted that the Central Government subsequently again arrived to the conclusion that the petItioner had melted 4 biscuIts. In these circumstances when the Collector had indirectly set aside the finding of the Deputy Collector It was incumbent upon the Central Government to have given a fresh notice to the petItioner if It wanted to revise the order on a fresh ground. It is also argued that the Central Government has placed reliance on certain wrItings on the reverse of weighment slip for which no opportunIty was given to the petItioner to explain. Reliance is placed on section 79 of the Gold Control Act under which no order of adjudication, of confiscation or penalty could be made unless the owner of the gold was given a notice in wrIting informing him of the grounds on which It was proposed to confiscate such gold or to impose a penalty. According to the learned counsel the petItioner has explained the wrItings on the weighment slip in paragraph 33 of the wrIt petItion. Reliance is placed on M/s Kishinchand Chellaram v. I. T. Commr. , Bombay (1), W. M. Jain v. Asstt Collector, Central Excise (2), Chaganraju v. State of A. P. (3), S. L. Kapoor v. Jagmohan (4), Nirode Baran Banerjee vs. Union of India (5) and Gem Palace v. Union of India (6 ). ;