S. Kalyanam, Member

1. Appeal under Section 81 of the Gold (Control) Act, 1968 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Collector of Customs (Appeals), Madras, confirming the imposition of a redemption fine and a penalty on the appellant. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri L. Suganchand Jain, Advocate for appellant and upon hearing the arguments of Shri S.K. Choudhury, Senior Departmental Representative for the respondent, the Tribunal makes the following:

2. This is an appeal against the order of the Collector of Customs (Appeals), Madras, dated 4.5.82 in No. C. 29 GC/65/1981 finding the appellant guilty of contravention of Section 6(1) of the Gold (Control) Act and imposing a redemption fine of Rs. 1,500/- in lieu of confiscation of 5 small pieces of primary gold of 22 ct. purity, weighing 3.900 gms. and one new gold necklace of the same purity, weighing 25.200 gms. under Section 73 and also a penalty of Rs. 750/- under Section 74 of the Act. The brief facts relevant for appreciation of the issues involved are as follows.

3. The appellant and his brother, S. Gajraj Jain are running a pawn broker shop at No. 94, South Car Street, Chidambaram. On the basis of intelligence, the officers of the Headquarters Preventive Unit, Madras, on 8.11.79, visited the shop of the appellant and scrutinised the accounts. During the course of the search they noticed a tin box containing 3.900 gms. of primary gold pieces and new gold ornaments as detailed in the adjudication order, which were not admittedly entered in the accounts of the pawn broker's shop. The appellant is the Managing Partner of the shop and at the time of the visit of the officers to the appellant's shop, S. Gajraj Jain brother of the appellant and a partner with him, was not present initially and appeared on the scene when the search was going on. Gajraj Jain, on the same day, gave a statement before the officers confessing that as the business of pawn broking was not satisfactory for quite some time, he decided to deal in small quantities of gold ornaments to known customers to meet his daily needs and accordingly purchased some quantities of gold ornaments from customers, got them polished and kept them for sale. He further admitted having purchased new ornaments from out-station brokers whose names and addresses he did not know and further stated that he was keeping all the ornaments for purpose of sale. With reference to the primary gold of 3.900 gms., he admitted that it was purchased from a customer.

4. On 9.11.79, the appellant's brother, Gajraj Jain sent a representation to the Assistant Collector of Central Excise, Pondicherry, retracting from the aforesaid confessional statement, submitting, inter alia, that the seized ornaments belonged to various persons who had pledged the same excepting the small pieces of primary gold and the gold necklace referred to above, which belonged to the appellant's wife. Proceedings were initiated as per law after examining the various persons mentioned in the representation of the appellant's brother dated 9.11.79, which eventually culminated in the order passed by the adjudicating authority ordering confiscation of the small pieces of primary gold and other gold jewelleries, in all weighing 298.700 gms. under Section 71 and imposing a redemption fine of Rs. 8000/- in lieu of confiscation of the same and also a penalty of Rs. 2500/- on the appellant, which on appeal before the Collector (Appeals) were reduced, respectively to Rs. 1500/- and Rs. 750/- as stated above. The appellate authority, while reducing the quantum of redemption fine as well as the penalty as stated supra, has modified the finding of the adjudicating authority and held the appellant guilty of contravention of Section 6(1) instead of Section 6(2) of the Act.

5. The learned counsel appearing for the appellant submitted that while the ap