R SETHURAJAN Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) IN my judgment the petitioner is entitled to the relief claimed by him as the order of the Collector of Central Excise impugned in this writ petition was a clear usurpation of jurisdiction.

(2.) THE following facts are not in dispute: THE petitioner is a partner of Messrs. Kesarla Audinarayaniah Setty Son & Co., Chickpet, Bangalore who are merchants carrying on business in bullion and jewellery. On or about 6th December 1955 three Arabs, who formed part of the entourage of the King of Saudi Arabia, who was on a visit to this country and was at that date at Bangalore, entered the shop of the petitioner and offered for sale a quantity of gold bars which they brought. THE market price of gold at the period for the type offered by these Arabs was about Rs. 92 per tola. THE price quoted was Rs. 91 per tola but the petitioner offered Rs. 90 per tola and the deal was concluded. THE gold offered consisted of 10 bars weighing 10 tolas each and the price payable therefore came to Rs. 9000. Out of this Rs. 4000 was agreed to be received in cash and the balance the Arabs agreed to take in the form of jewels in the shop of the petitioner. While these negotiations were proceeding in the petitioner's shop, some officers of the Excise Department entered the petitioner's premises and seized the gold as well as Rs. 4000 which was on the table. As a result of the examination of the Arabs who brought in the gold, the Customs and Excise officers were satisfied that the gold brought in by them was smuggled into this country in contravention of the Import Control Regulations and was, therefore, contraband.

(3.) THE petitioner submitted his explanation in the course of which he stated that Messrs. Kesarla Audinarayanaiah Setty Son & Co. of which he is the partnerbona-fidebelieved that the Arabs who brought the gold were lawfully in possession of it, that they were not aware that the gold was smuggled, that the price paid by them was a clear indication of theirbona fidesand that, therefore, they prayed that the gold seized from them might be returned to them or in the alternative that at least Rs. 4000 might be returned. This explanation was considered by the Collector of Central Excise, who passed an order dated 22-3-1956, the order which is impugned in this writ petition, directing the confiscation of the 100 tolas of gold and levying a penalty of Rs. 5, 000 on the petitioner and also directing that Rs. 4000 which had been seized in the petitioner's shop might be 'released' to Shri Abdulla as already ordered. I shall extract portions of this order instead of myself setting out the reasons why this penalty was imposed.