Commr. of C. Ex. vs Ramratan Shrivallabh Chandak

B.R. Gavai, J.—The present Reference has a chequered history. On the basis of the information received by the concerned authority under the Gold (Control) Act, 1968 search was conducted in the residential premises of Shri Ramratan Shrivallabh Chandak (since deceased) on 25-3-1974. The search continued for three days. During the course of the search, the primary gold was found in the almirah kept on the room of the second floor. In the first compartment of the almirah, 18 gold foils weighing 49.30 grams were found. At the base of this almirah, there was a drawer but that did not contain any incriminating material. The drawer was completely pulled out and it was found that there was a cavity in between the base of the drawer and the base of the almirah. In the cavity, Kalyan magazines were found lying and upon removal of these magazines one Dabba containing three cartons of Cuticura shaving sticks were found. Each carton of Cuticura shaving stick contained four gold slabs, i.e. total 12 gold slabs weighing 3730.800g. were found. In the cavity, a cotton cloth bundle containing 13 gold rods in the shape of Kadas weighing 1326.800g. were also found. These articles were seized and panchnama was drawn. On 28-3-1974 Ramratan Shrivallabh Chandak was asked to make a statement but he expressed his inability for not being well. A notice was issued to the said Ramratan to show cause as to why the seized primary gold be not confiscated under Section 71 of the Gold (Control) Act for contravention of Section 8(i) and 16 of the said Act. The said Ramratan was also prosecuted under Section 8(i) and Section 16 read with Section 85(ii) of the Gold (Control) Act, 1968.

In response, Ramratan filed reply to set up a case that he had no knowledge that the gold was kept in the almirah. His case was that gold was presumably kept by his mother, who had never informed about the said gold. Vide order dated 16-7-1974 the Central Excise Collector ordered absolute confiscation of the aforesaid material. A penalty of Rs. 5 lakhs was also imposed under Section 74 of the Act. Being aggrieved by the said order, Ramratan preferred an appeal. The Appellate Authority by order dated 27-3-1976 set aside the order dated 16-7-1974 being in violation of principles of natural justice and remanded the matter back to the Collector.

After remand, the Collector heard Ramratan and vide order dated 15-5-1976 ordered absolute confiscation of gold slabs and gold rods. As regards 18 gold foils weighing 49.300 g., the Collector ordered confiscation but permitted the gold foils to be redeemed on payment of fine of Rs. 500/-.

Being aggrieved thereby, Ramratan preferred an appeal before the Gold Control Tribunal. The appeal was dismissed on 12-12-1976. Aggrieved by the said orders, Ramratan made an application to the Central Government under the then existing Section 82 of the said Act. However, the said application came to be transferred to the Tribunal. During the pendency of appeal before the Tribunal, Ramratan died and his legal representatives were brought on record.

By the time the appeal had come up before the Tribunal, the Criminal Case was decided by the learned Chief Judicial Magistrate, Amravati vide order dated 12-10-1979. The learned C.J.M. held that the gold slabs, gold rods and gold foils were primary gold. Though the learned C.J.M. held that the gold foils were held to be in conscious possession of Ramratan, insofar as 12 gold slabs and 13 gold rods are concerned, the learned C.J.M. held that the accused cannot be held to be in conscious possession thereof. The learned C.J.M., therefore, with regard to possession of gold foils held that an offence under Section 85(ii) of the said Act has been established and sentenced him to pay a fine of Rs. 1000/- and in default to suffer R.I. for a period of one month.

However, the learned Tribunal vide its judgment and order dated 28-2-1986 confirmed the confiscation of 12 gold slabs and 13 gold rods without an option to redeem. However, the learned Tribunal reduced the penalty of Rs. 2,00,000/- to Rs. 30,000/-. Being aggrieved thereby, Writ Petition came to be filed before this Court being Writ Petition No. 2386/88. The learned Division Bench of this Court, vide judgment and order dated 20-4-2006 (2007 (207) E.L.T. 217 (Bom.)) quashed and set aside the order dated 28-2-1986 passed by the learned Customs, Excise and Gold Control Appellate Tribunal and restored to the file of the learned Tribunal keeping all the contentions of the parties open to be agitated before the learned Tribunal.

However, it will be relevant to refer to paragraph 18 of the judgment of the Division Bench which observes thus:-

"18. In the light of the aforesaid legal position, no doubt is left that the finding of the criminal court may have some effect on the order of confiscation though it is not always that acquittal in the criminal case ipso facto results in setting aside the order of confiscation passed by the competent authority under the Act. What is needed to be seen is: Are the basic facts common? Is the recovery of incriminating articles same? Have same witnesses been examined in both proceedings? Is there same charge of possession in both proceedings? Is the evidence same? If the answer to all these questions is in affirmative and in the absence of any material distinguishing features, it would be legally improper to allow the confiscation order to stand against the finding of the Criminal Court."

On remand, the learned Customs, Excise & Service Tax Appellate Tribunal vide judgment and order dated 19-9-2006 (2007 (219) E.L.T. 213 (Tri.-Mum.)) did not find any reason to disagree with the finding arrived at by the learned Chief Judicial Magistrate that the primary gold in the form of 12 gold slabs and 13 gold rods were not in conscious possession of the appellant. However, the learned Tribunal upheld the confiscation of 18 gold foils weighing 49.300g. and allowed to be cleared on payment of redemption fine of Rs. 500/-.

It appears that the Revenue having disagreed with findings of the learned Tribunal filed a Reference before the learned Tribunal. The learned Tribunal, however, held that on account of repeal of the said Act, the Reference was not tenable. As such, a petition came to be filed before this Court being Writ Petition No. 2240/2009 by the Revenue. On a concession by the respondent, the petition came to be allowed and the learned Tribunal was directed to consider the Reference. On remand in Writ Petition No. 2240/2009, the following question came to be referred for adjudication of this Court:-

"Whether, in terms of criteria/guidelines laid down by the Hon''ble High Court in paragraph 18 of its remand order dated 20-4-2006 in W.P. No. 2386 of 1988, this Tribunal was right in holding that there was no reason to disagree, on the question whether the respondent (accused) was in conscious possession of primary gold, with the findings arrived at by the ld. Chief Judicial Magistrate, Amravati in his judgment dated 17-10-1979 in Criminal Case No. 3887/74."

It will be relevant to refer to paragraph 18 of the judgment of the Division Bench of this Court in Writ Petition No. 2386/88. The Division Bench of this Court held that the finding of a Criminal Court may have some effect on the order of confiscation though it is not always that acquittal in the criminal case ipso facto results in setting aside the order of confiscation passed by the competent authority under the Act. The Division Bench held that what is needed to be seen is:

i. Are the basic facts common?

ii. Is the recovery of incriminating articles same?

iii. Have same witnesses been examined in both proceedings?

iv. Is there same charge of possession in both proceedings?

v. Is the evidence same?

The learned Division Bench after quoting the said questions, holds that if answer to all these questions is in the affirmative and in the absence of any material distinguishing feature, it would be legally improper to allow the confiscation order to stand against the finding of the Criminal Court.

Mr. S.K. Mishra, learned Assistant Solicitor General of India for applicant, fairly placed before us a communication dated 18-11-2013 on an enquiry made by the learned Assistant Solicitor General of India with respect to observations pointed out in paragraph 18 of the judgment, cited supra. It will be relevant to refer to the questions and answers as given by the Revenue:-

If the answer to all the aforesaid questions is in the affirmative, then the Revenue Authorities would have no other option but to follow the finding given by the learned Criminal Court. In that view of the matter, we find that the learned Tribunal on remand was justified in holding that there was no reason to disagree on the question whether the respondent accused was in conscious possession of primary gold with the findings as arrived by the learned Chief Judicial Magistrate, Amravati in his judgment dated 17-10-1979.

In the result, the Reference will have to be answered in the affirmative.

Needless to state that since the confiscation is in the year 1974 and it has been pending for a period of almost 40 years, we direct the Revenue Authorities to comply with the orders passed by the learned Tribunal within a period of three months from today. In view of the above, Civil Application (CAT) No. 4/2013 filed by respondents for releasing the golden articles stands disposed of accordingly.