Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Bhajrang Industries And Ors. on 24 March, 2004
Equivalent citations: 2004(173)ELT304(TRI-MUMBAI)
ORDER S.S. Sekhon, Member (T)
1. These eight appeals filed by the Revenue are being decided by this common order, as the issue involved is the same.
2. The issue is imposition of penalties under Rule 173Q in cases where excisable goods have been found not entered in the RG1 register and the resultant confiscation thereof ordered under Rule 173Q which was set aside by the Commissioner (Appeals), as he found that there was no merits in confiscation and imposition of penalties in view of the settled law on the subject which are mentioned in the impugned order. He also found that the basic records such as bill book, receipt book, purchase register etc have been admitted by the adjudicating authority to have been found at the time of the search itself and were expressly placed under seizure and the fact that relaxation had been given to Small Scale Units not have been taken into consideration and maintenance of up to date records on day to day basis were required to be treated is nothing but procedure infraction for which remedy was under Rule 226 and not by invoking Rule 173Q and he imposed token penalties of Rs. 500/- as in the case of appeal E/2812/01 and as regards penalty under Rule 209A, he set aside the penalty for lack of specific charges/allegations in the Show Cause Notice and no elaboration as to how the ingredients of Rule 209A satisfied.
3. The revenue has found such an order by the Commissioner (Appeals) to be not legal, proper and correct on the following grounds:
a) The Order-in-Appeal is not proper in as much as the facts of the case has not been properly appreciated by the Appellate Authority because it is an admitted fact that these goods were found unaccounted which itself shows that these were to be removed out side the factory without entering in the Excise records. And also no contrary evidence has come on record to show that there was accountal in some other records maintained by the respondent s and not making entry in the Excise records was a mere act of failure.
b) The same Appellate Authority while deciding the similar issue has taken contrary view in the case of M/s Texal Bearings, Gondal decided vide its Order in Appeal No 571 to 572/2001/Commr (A)/Raj dated 26.6.2001.
4. Heard both sides and considered the issues involved and it is found that
(a) Revenue has relied upon the decision in the case of Nizam Sugar Factory Ltd v. CCE 1987 (27) ELT 40 (A.P) and in Kirloskar Brothers Ltd v. Union of India 1988 (34) ELT 30 (Bom) to plead that for contravention of Rule 173 Q(1)(a)(b) and (c) and consequences thereunder should not be dependent upon mens rea. Therefore, setting aside of liability under Rule 173Q (1) as arrived at by the Commissioner (Appeals) were not called for.
(b) The two decisions of the Hon'ble High Courts on perusal are found to be cases where there was no proper maintenance of accounts especially entrance of production in the RG1 register, and there was also material evidence available of removal of excisable goods without payment of duty. Therefore, in such cases, the penal consequences of Rule 173Q were upheld. In the cases before us, there is no material of clandestine non duty paid removal along with the alleged non accountal in the production reports. It is also found that in the case of Bhillai Conductors (P) Ltd. v. CCE 2000 (125) ELT 781 (Tri), the submission that case law of Andhra Pradesh High Court in the case of Southern Steels 1979 (4) ELT (J-402) wherein the Court found that some goods not entered in RG1 register but there was no preparation of illegal preparation of those goods then there was no warrant for rendering such goods to confiscation was relied upon and considered along with the case of Garden Silk Mills 1991 (51) ELT 373 wherein the Andra Pradesh decision has been discussed, were considered along with catena of cases on the above subject, and it was held, by majority, that goods not entered in RG1 are not liable to confiscation and no penalty could be imposed under Rule 173Q in absence of mens rea and that penalty of Rs 2000/-could be imposed under Rule 226 of the Central Excise Rules, 1944. This finding of the Tribunal as arrived at, by majority, in Bhilai Conductors (P) Ltd has been subsequently followed by this Tribunal and in the present case no reasons are brought forth to take a different view.
(c) CBEC vide its letter No 207/37/M/77-CX-6 dated 21.9.1978 have issued guidelines to be observed during seizure, according to these guidelines if the violations of the Rules is purely technical in nature and no mala fides emerge on part of an assessee, there is no deliberate attempt to evade duty, then they should not be seized. The simplicitor delayed accountal by 2/3 days in these cases where assesses are not covered by a detailed accounts type of control, have admittedly maintained private records of production would be on a technical violation not calling for seizure or and confiscation and penalty under Rule 173Q (SIC).
5. In this view of the matter, no merits are found in the Revenue's appeals and the same are dismissed.