P SADASHIVACHAR Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) These Writ Petitions arise under the Gold Control Rules, 1963 (hereinafter referred to as 'the Rules') made by the Central Government in exercise of the powers conferred by S.3 of the Defence of India Act,1962. They are directed against two orders of adjudication passed by the Collector of Central Excise, Bangalore (Respondent No.1). confiscating the gold ornaments seized from the residence of the petitioners on search on 27-8-1963 and further levying personal penalties under Rule 126L(16) of the Rules.

(2.) The petitioner in WP. No.311 of 1970 P.Sadashivachar, who will be referred to as Petitoner 1, and the petitioner in WP. No.312 of 1970 Babachar, whom we shall refer as Petitioner 2, are partners of a firm of jewellers carrying on business in Mangalore Town under the name and style of Canara Jewellers'. The said firm was carrying on business when the Rules were brought into force by the Central Government on 9-1-1963. The Rules prohibit the manfacture and sale of gold ornaments of purity exceeding 14 carats. Every dealer who immediately before the commencement of the Rules is registered under any law with respect to Sales Tax was required to make a return as to the gold in his possession or under his control on the date of such commencement. Accordingly the firm 'Canara Jewellers' furnished a return on 11-1-63. Although Rule 126C prohibited manufacture and sale of gold ornaments of purity exceeding 14 carats, the proviso to the said Rule enabled the existing dealers to sell or otherwise transfer such ornaments as were in their possession on 9-1-1963 within a period of thirty days from the data of the commencement of the Rules. Canara Jewellers' sold some of the gold ornaments or otherwise transferred the same before 9-2-1963. On 9-2-1963 the firm furnished a second return as to its stock position which was verified by the Central Excise authorities. It is relevant to state that the firm 'Canara Jewellers' was registered as a 'dealer' under the Mysore Sales Tax Act, 1957 and was also asssesed as a firm under the Income Tax Act. The firm 'Canara Jewellers' has two places of business in Mangalore Town-one in Ganapathi High School Road and the other at Hampankatta. Petitioner 1 is in charge of the business in the premises at Ganapathy High School Road and Petitioner 2 is in charge of the business at Hampankatta. Petitioner 1 and Petitioner 2 have their separate residence in different localities in Mangalore Town.

(3.) On 27-8-1963 the residential houses of both the petitioners were searched by the officers of the Central Excise Department on the ground of alleged contravention of the Rules by Canara Jewellers'. Gold and gold ornaments weighing 1622-600 grams valued at Rs. 12,000 were seized from the residence of petitioner 1. Gold and gold ornaments weighing 1493 grams valued at Rs.10,000 were seized from the residence of Petitioner 2. Separate show cause notices were issued to the petitioners 1 and 2 by the Assistent Collecter of Central Excise Bangalore en 10-1-1964 and 18-1-1964 respectively. The show cause notices are similarly worded and it is sufficient it the material portion of the show cause notice issued to Petitioner 1 is set out. It reads : NOTIC1 To Mr. P. sadshigvaohar, Partner, M/s. Canara Jewellers, Mangalore, by RPAD. Where as it appears that Mr. P. Sadashivachar, Partner of M/s. Canara Jewellers, Mangalore has contravened Rules 126F(1) and 126H(1) of the Defence of India (Amendment) Rules 1963 in as much as he had secreted at his residence gold details of which have been given here under and that he had not furnished a return under Rule 126F(1) of the Defence of India (Amendment) Rules in respect of the gold referred to: <FRM>JK1509205A.htm</FRM> Seized on 27-8-1963 from the residence of Sri P. Sadashivachar. This allegation is based on (i) Mahazar dt.27-8-1963.