LATE MANGILAL AGARWAL Vs. ASSISTANT COMMISSIONER OF INCOME

JUDGEMENT

(1.) IN this appeal the following questions were framed as substantial questions of law arising for consideration in this appeal:

(2.) THE facts emerging from the material placed before us and relevant for the present purposes are that in a search conducted at the premises of the Mangi Lal Agarwal, the assessee, since deceased and represented by his heirs and legal representatives, by the customs authorities, 11 pieces of primary gold weighing 765.150 and 53 gms. of gold ornaments were recovered from his house and the same were seized by the customs authorities. The proceedings for confiscating the primary gold were pursued. However, the adjudicating authority did not find that the assessee was in possession of gold ornaments in breach of provisions of Gold Control Act or the Customs Act and the same were released. Adjudicating authority under the Gold Control Act did not accept the assessee's explanation that the primary gold weighing 765.150 gms. did not belong to him except 6.800 gms. which were small articles used for Pooja. The assessee has claimed that he has received primary gold from 3 different goldsmiths to whom the ornaments were brought by Shri Bhopal Singh, Om Prakash Gupta and Shri Gauri Shanker Singhal respectively for the purpose of making new ornaments and since making of new ornaments required dye cutting of the primary gold which came into existence by melting gold ornaments for the purpose of making new ornaments, were delivered to the assessee for getting the primary gold dye cut through some registered goldsmiths having the facility of dye cut. Adjudicating authority having not accepted the aforesaid explanation furnished by the assessee ordered confiscation of the primary gold and also levied penalty with an option to redeem the same on payment of the redemption fee. On appeal before the CEGAT as was then existing of the JM and TM differed, the opinion of TM was for affirmation of the order of adjudicating authority and JM reached different conclusion on considering the material before him and recorded his conclusions as under: It is on record that the owners of the primary gold filed their affidavit before the adjudicating authority. Copies of the statutory record of the certified goldsmiths concerned were also filed, but the adjudicating authority discarded them mainly taking into consideration the human conduct, but forgetting the aforesaid vital and material evidence on the record. Under these circumstances, I hold that the primary gold except the three pieces weighing totally 6900 gms. belonged to the said owner. In fact, this fact is also borne out by the record of the case. In his impugned order, while ordering for the confiscation of the primary gold with an option to redeem the same on payment of a redemption fine, the adjudicating authority also ordered that on redemption, the primary gold shall be converted into ornaments by licensed gold dealers. Accordingly, the appellants redeemed the same and returned the same to the respective owners after getting it converted into ornaments by a licensed gold dealer and informed the adjudicating authority accordingly. The relevant communication is on our record. There being difference of opinion, the matter was referred to the Third Member, who after considering the state of affairs of the evidence agreed with the finding reached by the learned JM and appeal was allowed. The gold was released from confiscation under Gold Control Act.

(3.) SECTION 71 of the Gold Control Act under which any gold found in contravention of the provisions of the Gold Control Act is to be confiscated reads as under: Section 71. Confiscation of gold. -