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the Drugs (Control) Act, 1950
Section 8 in the Drugs (Control) Act, 1950
Section 11 in the Drugs (Control) Act, 1950
Hindustan Steel Ltd vs State Of Orissa on 4 August, 1969

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Customs, Excise and Gold Tribunal - Mumbai
Shri Chandrakant B. Shah And Ors. vs The Collector Of Customs (Prev.) on 25 September, 1985
Equivalent citations: 1987 (12) ECR 779 Tri Mumbai
Bench: D T K.S., K G Hegde

ORDER

K.S. Dilipsinhji, Member (T)

1. The captioned appeals arise out of the same adjudication order No. XVII (GC) 8-48/76 dated 12.3.1979 passed by the Collector of Customs (Prev.) Bombay under which he held various contraventions of Gold Control Act as proved against the appellants. These appeals were, therefore, heard together and are being disposed of under this common order. However, for the sake of clarity it is preferable to deal with them separately in accordance with the order in which they were argued personally before us.

2. Taking up the appeals of M/s. Parimal Jewellers and its partner Shri C.B. Shah, Advocate Shri Desai pointed out that the Show Cause Notice dated 29.10.1976 issued by the Supdt. of Central Excise was addressed to M/s. Parimal Jewellers, Cambay, Gujarat. Though the partners of M/s. Parimal Jewellers were mentioned in the address, it was only the firm which was asked to show cause against the various contraventions as alleged in the Show Cause Notice. No partners of the firm including Shri C.B. Shah were asked to show cause to the Collector of Customs (Prev.) against any alleged contravention of the Gold Control Act. However, in his impugned order, the Collector levied a penalty of Rs. 5,000/- on Shri C.B. Shah under Section 74 of the Gold Control Act. The order of the Collector in this behalf was, therefore, bad in law and the same was passed without giving any opportunity to Shri C.B. Shah for his defence. Continuing his arguments further Shri Desai, Advocate stated that whatever Shri C.B. Shah did, was in his capacity as a partner of the firm and no reply was sent by him to the Show Cause Notice as he was not called upon to show cause. Hence no specific contention had been advanced in the Appeal Memo of Shri C.B. Shah except the prayer that the Collector's order should be set aside and consequential relief be given to Shri Shah.

3. Coming to the appeal filed by M/s. Parimal Jewellers, Cambay the Advocate argued that the case against the appellants arose out of a search of the premises of Shri Bimalkumar Das by the Gold Control Officers on 19.5.1976 and the investigations made by them subsequently. On that day the premises belonging to Shri Bimalkumar Das at 2 places were searched by the Gold Control Officers. The search of the premises at 109, Dhanji Street, Bombay-3 did not yield any contraband article while the search of Room No. 18, Building No. 58, 1st Khatar Galli, Bombay-4 resulted in the recovery of gold ornaments as mentioned in the Panchnama of the search as follows:

1. Cupboard (Bimalkumar Das) 98.200 gms.

2. Working desk of S.K. Das 471.700 gms.

3. Gaur Mohan Maji 250.000 gms.

While the search was being carried on at the Khatar Galli premises of Shri Bimalkumar Das, Shri C.B. Shah entered the premises with a hand bag and the search of the hand bag resulted in the recovery of gold ornaments weighing 362.050 gms. and certain papers. Thereafter the residential premises of Shri C.B. Shah were searched and new gold ornaments weighing 2118.600 gms. valued at Rs. 98,700/- were seized in the belief that they violated the provisions of the Gold Control Act. The case was thereafter adjudicated by the Collector in which he held that the violation of Section 27(7)(b) of the Gold Control Act was proved, and also contraventions of Sections 31 and 36 read with Rule 13(1) of the Gold (Control) (Forms, Fees and Misc. Matters) Rules, 1968 were proved. The Advocate argued that Shri C.B. Shah was dealing in gold business at Bombay on behalf of the firm which has a licence for doing gold business under Section 27 at Cambay. The Advocate drew our attention to the copy of the licence submitted in the paper book and to the endorsement made on the reverse of the licence under the signature of Assistant Collector of Central Excise, Nadiad which stated that the dealer was permitted to send gold ornaments for sale to the States of Gujarat, Maharashtra etc. The Advocate stated that this endorsement had been cancelled subsequently but this would not make any difference to the facts of the appeal for the reasons he would advance anon.

4. Shri Desai stated that as a result of stay granted by the Supreme Court in the Civil Misc. Petition No. 1092 of 1973, a copy of which was submitted to the Tribunal, the operation of Section 27(7)(b) of the Gold Control Act had been suspended. Shri Desai referred to the Government of India's instructions as contained in their letter F. No. 1/90/68-GO.II dated 15.2.1972 and the Trade Notice issued by the various Collectors subsequently in pursuance thereof. Therefore, this position continued from the date of the Supreme Court's order on the Stay petition dated 15.2.1973. The appellants, therefore, continued to do business in gold in Bombay on the basis of the aforesaid relaxation of law granted by the Supreme Court. Shri Desai stated that Shri C.B. Shah was maintaining a record in the prescribed form G.S. 12 at Bombay and this showed the ornaments received form Cambay for sale at Bombay. He argued that the ornaments in question were duly entered in the prescribed record of the firm in Cambay and in subsidiary records in Bombay. The ornaments seized from Shri C.B. Shah on 19.5.1976 were recovered from one bag and they were all in new condition and in trade quantity. They were the official stock-in-trade of the gold dealer and did not belong to Shri C.B. Shah personally. The Gold Control Officers recorded the statement of Shri C.B. Shah on 19.5.1976 and he admitted that the gold ornaments recovered from him were brought by him personally from Cambay. In his subsequent statement dated 23.6.1976 he deposed that he had been conducting business in gold as a travelling salesman on the strength of gold licence held by the firm at Cambay. He further stated that he used to get gold ornaments from Cambay through Angadia. But the Collector disbelieved this statement on the basis of Andadia's statement that no gold was received by them from Cambay but only letters addressed to Shri C.B. Shah. Shri Desai contended that the seized ornaments were duly entered in the subsidiary G.S. 12 accounts by Shri C.B. Shah and no opportunity was available for fabricating any record. He continued that all entries in the G.S. 12 at Bombay tallied with the parent record G.S. 12 of the firm at Cambay. Shri Desai stated that the firm did not carry on any business from the Gaiwadi Premises which was the residence of Shri C.B. Shah. The old ornaments found at the residence belonged to his wife and those were not seized by the Gold Control Officers, as these were his wife's personal jewellery. There was no other evidence to show that the Gaiwadi premises were used for business in gold dealing as there was no name board, equipments for manufacturing or testing gold ornaments etc. Only new ornaments had been recovered from the possession of Shri C.B. Shah from the premises and this would not constitute any offence under the Gold (Control) Act. As regards the other contraventions of Sections 31 and 36 as established by the Collector, Shri Desai submitted that these arose out of the alleged contravention of Section 27(7)(b) of the Gold (Control) Act. If it was held that the contravention of Section 27(7)(b) was not established the remaining contraventions of law would also fail. As regards Shri Bimalkumar Das's statement that he worked for and on behalf of Shri C.B. Shah, it would appear that this statement was not believable. As per the adjudication order under appeal, an option was given to him for redeeming gold ornaments weighing 819.00 gms. seized from Khattar Galli premises and Shri B.K. Das had exercised this option for redeeming the gold ornaments which showed that the gold and gold ornaments were belonging to him and not to Shri C.B. Shah or M/s. Parimal Jewellers. Only one item belonged to Shri C.B. Shah and this was acknowledged in the impugned order. The impugned order did not disclose anything about Shri C.B. Shah having got the gold ornaments made on behalf of M/s. Parimal Jewellers and hence the Collector's finding that M/s. Parimal Jewellers violated Section 27(7)(b) of the Gold (Control) Act was not correct. Shri B.K. Das's statement in this behalf was that of co-accused and it could not be accepted as correct. Shri Desai cited the judgment of the Supreme Court in the case of Hindustan Steel Mills Ltd. v. State of Orissa AIR 1970 S.C. 263 and CEGAT's order 1986 (20) ELT 1980 (Tribunal) to urge that no penalty be levied on M/s. Parimal Jewellers.

5. Advocate Shri Shah next took up the appeal of Shri B.K. Das. He stated that as per the order under appeal Shri B.K. Das redeemed gold and gold ornaments weighing 819.900 gms. seized from the Khattar Galli premises on payment of the redemption fine of Rs. 15,000/-. Shri B.K. Das had been found guilty by the Collector of abettment of M/s. Parimal Jewellers in the contravention of the Gold (Control) Act. At the time of search of Shri B.K. Das's premises at Khattar Galli on 19.5.1976, 2 certified gold smiths were present though the show cause notice issued by the Supdt. Central Excise proceeded on the fact that the appellant's brother Shri S.K.P. Das manufacturing gold and gold ornaments without a certificate. A separate show cause notice was issued to Shri B.K. Das and hence, he was not informed of the departments case against M/s. Parimal Jewellers and hence he had no chance to rebutt the allegations of aiding and abetting M/s. Perimal Jewellers. Besides, the documents relied upon by the department in the case against M/s. Parimal Jewellers were different from the documents relied upon by the department in the case against Shri B.K. Das, Shri S.K.P. Das and Shri Gaour Mohan Maji. Hence Shri B.K. Das was denied a real opportunity for defence. Coming to the contraventions of law held by the Collector as established in his impugned order, Shri Shah stated that the allegations against Shri B.K. Das in the show cause notice were for contraventions of Section 8(1) read with Sections 8(6), 11(1) and 39(1) of the Gold (Control) Act as Shri B.K. Das accepted primary gold in the form of 'Tukdi' from M/s. Parimal Jewellers of Cambay through their partner Shri C.B. Shah and he was found in possession of primary gold weighing 669.900 gms. and was found to have manufactured gold ornaments weighing 20 kgs. approximately for M/s. Parimal Jewellers, Cambay by employing nine persons without he himself having a goldsmith's certificate and thus he aided and abetted in the commission of offences by M/s. Parimal Jewellers. As regards the contraventions of Section 8(1), Advocate Shri Shah argued that the appellant was not present at the premises on 19.5.1976 when the Gold Control Officers visited the same at Khattar Galli. Hence he could not be held to have possessed primary gold. He also drew our attention to the fact as mentioned on page 19 of the impugned order that 98.200 gms. of primary gold was recovered from the cupboard of Shri B.K. Das at Khattar Galli premises. Advocate Shri Shah argued that there was no evidence to show that the cupboard belonged to Shri B.K. Das. Shri B.K. Das's statement was recorded under duress and hence the same was not admissible. The cross-examinatiom of the Seizing Officer before the adjudicating authority further confirmed this fact as it showed that certain portions of Shri B.K. Das's statements were incorrect. Besides, other goldsmiths were present at the premises and their statements were not recorded. It was observed by the adjudicating officer on the basis of Shri B.K. Das's statements that Shri S.K.P. Das did not have a goldsmith's certificate. But this was not a fact as Shri S.K.P. Das had a certificate, a photostat copy of which was submitted later. This showed that Shri B.K. Das's statement was not correctly recorded. There was no evidence to show that Shri B.K. Das accepted primary gold in contravention of Section 8(1). As regards allegation for contravention of Section 8(6), no evidence was adduced to show that Shri B.K. Das was buying, acquiring, accepting or receiving, selling, delivering or transferring any primary gold or article. Hence, the allegations in this behalf were not relevant and not true. As regards the alleged contravention of Section 11(1) the show cause notice issued to Shri B.K. Das did not show the manufacture of ornaments from primary gold. There was no statement from Shri B.K. Das that he manufactured gold ornaments. He had only got some gold ornaments made from the nine gold-smiths who were manufacturing the same at the Khattar Galli premises. As regards the alleged contravention of Section 39(1), it was accepted that Shri B.K. Das did not have a certificate. However, he did not require the same as he was not working as a goldsmith. Shri S.K.P. Das and Shrt Gaur Mohan Maji had the goldsmith's certificates and it was these two persons who manufactured gold ornaments and not Shri B.K. Das. In view of these circumstances, Shri Shah requested that the penalty levied on Shri B.K. Das was not legal and justified and that the same should be remitted.

6. Advocate Shri Shah next took up the case in the appeal of Shri S.K.P. Das. He explained that Shri S.K.P. Das had been penalised to the extent of Rs. 1000/-. A quantity of 471.700 gms. of gold and gold ornaments was seized from the working desk of Shri S.K.P. Das on 19.5.1976. Shri S.K.P. Das was a certified goldsmith and therefore, gold and gold ornaments seized from the working desk were not liable to confiscation. He had stated so in his reply to the show cause notice and this was acknowledged by the Collector in his adjudication order, vide page 14. Shri S.K.P. Das had subsequently produced a photostat copy of the goldsmiths certificate and hence there was no offence by Shri S.K.P. Das. Shri Shah further argued as per Section 99 the gold seized from Shri S.K.P. Das had to be treated as belonging to him. The same was not liable to confiscation and it should be ordered to be released. He also prayed for setting aside the order of the penalty of Rs. 1,000/-.

7. As regards the appeal of Shri Gaur Mohan Maji, Shri Shah stated that he had been held guilty of contravening Section 55 of the Gold (Control) Act and a quantity of 250.000 gms. of gold had been seized and confiscated from him. The learned Advocate admitted that no entry had been made in the G.S. 13 account of Shri G.M. Maji for this gold. Since the gold belonged to the Customers of Shri G.M. Maji, Section 71 was attracted and since the owners had not been given a show cause notice, the gold could not be confiscated. The adjudicating officer did not make enquiry about the ownership of the gold and hence his order of confiscation was bad in law. This gold was redeemed by the appellant's brother Shri B.K. Das and there was no dispute in this behalf. However, since this gold was not offending, Shri Shah submitted that the gold should be released and the order of the penalty on Shri G.M. Maji be set aside.

8. Shri Senthivel, the Sr. Deptl. Representative presented the Respondent's case. So far as the appeal of Shri C.B. Shah is concerned, he conceded that no seperate show cause notice was issued to Shri C.B. Shah. But the names of the partners were clearly indicated in the show cause notice and since both the firm and the partners were involved, and the same was sufficient to comply with the requirements of the law. He, further, referred to the facts of the case and stated that this confirmed that both were involved. Further, the reply to the show cause notice on behalf of the firm was sent by Shri C.B. Shah. Hence, Shri Senthivel submitted that Shri C.B. Shah had been correctly penalised.

9. As regards the offence of the firm M/s. Parimal Jewellers, the learned S.D.R. drew our attention to Section 27(7)(b) which he read out. He next submitted that as per the decision of the Andhra Pradesh High Court in the case of Laxmi Jewellery v. Government of India and Ors. the High Court had clearly upheld the vires of Section 27 (7)(b), of Gold (Control) Act, "Gold Control" [compiled by Shri D.N. Kohli and Shri K.N. Mehta, Second edition P. 11-455]. Hence M/s. Parimal Jewellers could not have transacted the business outside their licence (premises in Cambay. He also drew out attention to the Addl. Collector's findings in his order that there was no evidence to show that the gold ornaments seized from Shri C.B. Shah at Bombay were received from the firm at Cambay and that the premises at Bombay were not approved for dealing in gold by M/s. Parimal Jewellers. The appellants had not been able to correlate the entries in their G.S. 12 account with the ornaments seized from them. The vouchers belonged to M/s. Parimal Jewellers and the recovery of ornaments and the documents were made from the residential premises of Shri C.B. Shah. The personal jewellery of his wife were not seized and was returned to her. Only the stock-in-trade of M/s. Parimal Jewellers had been seized by the Gold Control Officers. The chits recoverd from his premises clearly established that M/s. Parimal Jewellers were carrying on business as a gold dealer from the residential premises of Shri C.B. Shah. He did not disclose his correct residential address when he was apprehended by the Gold Control Officers at Khattar Galli premises on 19.5.1976. The correct residential address was obtained by the officers through a discreet way, referred to in Shri C.B. Shah's statement dated 26.8.1976 as incorporated in the order of the Collector of Customs (Prev.). The SDR pointed out that the diaries seized from Shri Shah's residential permises as also chits, loose papers, duplicate papers from bound books etc. showed that M/s. Parimal Jewellers were indulging in getting gold ornaments made and manufactured from the residential premises of Shri C.B. Shah. This evidence proved that M/s. Parimal Jewellers were conducting the business of making, manufacturing ornaments at Bombay without any dealers' licence. The chits recovered from the premises of Shri C.B. Shah showed the payments of labour charges for the manufacture of the ornaments. Hence there was no doubt that M/s. Parimal Jewellers contravened Section 27(7)(b) and also Section 31 of the Gold (Control) Act. They did not have the registration as a gold dealer for the premises in Bombay and no accounts in prescribed form GS 12 were maintained by M/s. Parimal Jewellers at Bombay. Only a subsidiary GS 12 was maintained at Bombay which was not correctly recorded. Shri B.K. Das's statement clearly confirmed, that he had got manufactured about 20 kgs. of gold ornaments for M/s. Parimal Jewellers. Since M/s. Parimal Jewellers acquired gold in contravention of Section 31 in Bombay, the acquisition and sale of gold was in violation of Section 36 ibid also, as both the sections were co-related. Hence offences under Section 31 and 36 were established. For these offences it was legitimate for the Collector to put a penalty both on the firm as well as on the partner and he supported his contentions by citing the case of M/s. Agarwal Traders ELT 1983 p. 1469 and adding that the provisions of the FER Act were identical with provisions of the Gold (Control) Act in this behalf and that the ratio of the decision cited would apply to the case under appeal.

10. Coming to the appeal of Shri B.K. Das, the SDR submitted that the show cause notice issued to him did not give details of his aiding and abetting M/s. Parimal Jewellers of Cambay/in the body of the show cause notice, itself, but the required details were furnished in the annexure to the show cause notice. Shri C.B. Shah's statement dated 19.5.1976 and Shri S.K.P. Das's statement dated 19.5.1976 were admissible and these two prove Shri B.K. Das' aiding and abetting M/s. Parimal Jewellers. Shri S.K.P Das had admitted in his statement that his brother Shri B.K. Das got gold ornaments manufactured for M/s. Parimal Jewellers by employing nine certified gold smiths. It was true that separate show cause notices were issued to M/s. Parimal Jewellers and Shri C.B. Shah on the one hand and Shri B.K. Das, Shri S.K.P. Das, and Shri Gaur Mohan Maji on the other. But the basic evidence was the same in both sets of show cause notices. Shri Gaur Mohan Maji had also stated in his statement about implication of Shri B.K. Das in the contravention of Gold (Control) Act. The Khattar Galli premises belonged to Shri B.K. Das and he had made confessional statement admitting the contravention of Gold (Control) Act. These facts would establish abetment by Shri B.K. Das. It was also significant to observe that though Shri B.K. Das had claimed that the gold and gold ornaments seized were belonged to customers, their names had not been mentioned. Therefore, this claim was wrong. The G.S. 12 record had not been maintained and the names of the customers required to be entered in this register, were not entered. Besides no vouchers had been maintained which would show the particulars of the ornaments received to identify the owners. This was clearly in contravention of Gold Control (Identification of Customers) Rule 1969. The Sr. Deptl Representative therefore, submitted that the Collector's order in respect of Shri B.K. Das was correct and that the same should be upheld.

11. As regards the appeals of Shri S.K.P. Das and Shri Gaur Mohan Maji, the S.D.R. submitted that a small penalty of Rs. 1,000/- each had been levied on them and that the same amount was not heavy and therefore considering their involvements in the contraventions of law, the same needed to be maintained.

11A. Advocate Shri S.G. Mehta in reply drew our attention to the case of Manik-Chand Paul and Ors. AIR 1984 SC 1249 : 1985 ECR 514 (SC) in which the Supreme Court had ruled that the sale of gold ornaments through travelling salesman was not permissible in view of Section 27(7)(b) and that withdrawal of this facility being regulatory, would not violate any rights of parties. However, he pleaded that the Government of India had relaxed this provisions and he submitted for our perusal a copy of the order issued by the Government allowing relaxation in the provisions of Section 27(7)(b) up to 31.3.1985.

12. Advocate Shri Shah stated in reply that the goldsmiths were not required to issue vouchers or they were covered under the Gold Control (Identification of Customers) Rule 1969. These apply to gold dealers only. So far as the goldsmiths were concerned they were only required to maintain a simple from of account in GS 13. Shri Shah further drew our attention to the cross-examination of Supdt. Shri B.A. Naronha and particularly to question No. 8 as to whether he had collected any material during the investigations of the case that Shri B.K. Das had in fact manufactured ornaments weighing 20 kgs. for Shri C.B. Shah of M/s. Parimal Jewellers. Shri Naronha had replied that this was on the basis of his own statement and that no other evidence was collected. He also drew our attention to Question No. 9 and answer thereto that there was no specific allegation that Shri B.K. Das had manufactured 20 kgs. of gold ornaments for M/s. Parimal Jewellers by employing 9 persons. In view of these facts Shri Shah repeated his request for allowing the three appeals of S/Shri B.K. Das, S.K.P. Das and Gaur Mohan Maji.

13. We have examined the submissions made on both sides. For proper understanding of the facts, it is necessary to consider what relaxation of law was permitted by the Government. Pursuant to the Supreme Court's order in Writ Petition No. 88/1973 with Civil Misc. Petition No. 1092 of 1973 the Supreme Court had stayed the operations of the instructions contained in the Government's letter F. No. 1/90/68-GC-I1 dated 15.2.1972. As a result the Collectors permitted maintenance of the position which prevailed prior to the issue of the Government's instructions dated 15.2,1972. This position permitted the dealers to send ornaments on approval through travelling salesmen to other dealers outside their approved premises. It is in this context that the endorsement made by the Asstt. Collector of Central Excise Nadiad is found on the licence of M/s. Parimal Jewellers. This was a limited facility to the dealers for sending their ornaments to other dealers in other towns in relaxation of the provisions of Section 27(7)(b). It is not the appellants case at any time that apart from this relaxation, other relaxations of law were granted, including receiving of ornaments from the customers or manufacturing of ornaments for customers at a place other than the approved premises as indicated in the licence as a dealer. Therefore, the first point that to be considered is whether M/s. Parimal Jewellers' subsidiary account at Bombay was properly maintained and whether they did anything which was beyond the permission granted. Shri B.K. Das in his statement dt. 13.5.1976 had admitted that he employed 10 goldsmiths at Bombay for manufacture of gold ornaments for M/s. Parimal Jewellers through its partner Shri C.B. Shah. He had also admitted the receipt of gold in primary form and pure gold bangles from Shri C.B. Shah for conversion into ornaments. He had further deposed that since these transactions were illegal no vouchers were received from Shri C.B. Shah. He had confirmed that the gold ornaments belonged to Shri C.B. Shah. Shri C.B. Shah had also admitted in his statement dated 23 6.1976 that he had been conducting the business in gold ornaments as a travelling salesman of M/s. Parimal Jewellers. In his statement dated 20.5.1976 Shri C.B. Shah admitted that the gold ornaments recovered from Gaiwadi premises were stock-in-trade of his travelling business. Various documents including the firms' vouchers and chits were recovered from the possession of Shri C.B. Shah and he had explained in his statement dated 26.8.1976 and 6.9.1976 that these pertained to his business of dealing in gold. He had admitted having given 42.650 gms. of pearls to one Shri V.S. Vernekar for manufacture of gold ornaments. These indicated that Shri C.B. Shah as a partner of M/s. Parimal Jewellers was involved in acquiring and transferring gold at Bombay besides getting the ornaments made at Bombay on behalf of the firm. Though a claim had been made that the ornaments seized from Shri C.B. Shah's premises were received from M/s. Parimal Jewellers at Cambay, there is no documentary evidence like vouchers to show that the ornaments were so received. On the other hand, there is an admission of Shri C.B. Shah himself coupled with the evidence from the goldsmiths which showed that M/s. Parimal Jewellers had contravened Section 27(7)(b) and Sections 31 and 36 of the Gold (Control) Act. In view of these findings we hold that the order of the Collector of Customs (Prev.) in respect of M/s. Parimal Jewellers is both legal and fair. There is, therefore, no reason for us to interfere with the same.

14. In so far as the Collector's order of levy of penalty of Rs. 5,000/- on Shri C.B. Shah is concerned, it is seen that the same had been levied without the issue of show cause notice to Shri C.B. Shah. The name of Shri Shah was just mentioned among the names of the partners in the show cause notice issued to M/s. Parimal Jewellers. But Shri C.B. Shah has not been called upon to show cause against any alleged contravention of the Gold (Control) Act. In view of this fact, we cannot accept the explanation of the learned Sr. Deptl. Representative that adequate opportunity was given to Shri C.B. Shah for showing cause. Since principles of natural justice had not been complied with, we find that the Collector's order of levy of penalty of Rs. 5,000/- on Shri Shah is bad and accordingly we set aside the same.

15. So far as Shri B.K. Das is concerned, it is seen that he had redeemed confiscated gold ornaments weighing 819.900 gms. He had been receiving primary gold from Shri C.B. Shah for manufacture of gold ornaments and the records seized from him showed more than 20 kgs. of gold ornaments having been manufactured by him for M/s. Parimal Jewellers. He had admitted that he did not maintain any accounts in the prescribed form for the gold received from Shri C.B. Shah. He had also employed other goldsmiths to carry out the work of manufacture of gold ornaments for M/s. Parimal Jewellers. His own brother Shri S.K.P. Das stated in his statement dated 19.5.1976 that the gold ornaments weighing 362 050 gms. recovered from Shri C.B Shah on that day at Khattar Galli premises belonged to his brother except one article. In his subsequent statement dated 17.5.1976 he had accepted the fact of having employed 10 goldsmiths for manufacture of gold ornaments. This was in contravention of the provisions of the Gold (Control) Act. In view of this foregoing facts, we find that the Collector's findings against Shrt B.K. Das are quite correct and we confirm the same.

16. As regards the appeals of S/Shri S.K.P. Das and Shri Gaur Mohan Maji, it is seen that they had been penalised Rs. 1,000/- each by the Collector of Customs (Prev.), Bombay. Though gold and gold ornaments weighing 471.700 gms. and 250.00 gms. were seized from S/Shri S.K.P. Das and Shri G.M. Maji these do not belong to them. Both of them had admitted that they were working as goldsmiths on behalf of Shri B.K. Das on payment of Rs. 100/- per month plus free boarding and lodging. The gold seized from them had been redeemed by Shri B.K. Das indicating that he was the owner of the same. Therefore, though an argument had been advanced that the gold seized from Shri S.K.P. Das and Shri Gaur Mohan Maji could not be confiscated under Section 71, as the owners had not been give notice, it is incorrect to accept the plea that this gold was received on behalf of their customers. In fact both of them had admitted that they did not maintain any account in the form G.S. 13. Therefore, except for the belated plea at this stage there is no evidence to show that the gold belongs to the customers of the two appellants. They failed to indicate their names and addresses which were required to be maintained in the G.S. 13 account. The plea put forward by the Advocate in their appeals that the gold seized from them was not liable to confiscation is, therefore, not valid and has to be rejected. On their own admission, there has been a contravention of Section 55 in respect of the gold recovered from them and, therfore, the gold has been correctly confiscated and the Collector has correctly levied a penalty of Rs. 1,000/- each on them under Section 74. In view of these findings, we hold that the Collector's order of levy of penalty is correct and, accordingly, we reject the appeals of S/Shri S.K.P. Das and Gaur Mohan Maji.