Allahabad High Court
Mohd. Sharif Mohd. Amir And Anr. vs Union Of India (Uoi) And Ors. on 4 August, 1988
Equivalent citations: 1989(19)ECC90
ORDER R.R. Misra, J.
1. By means of this writ petition the petitioners have challenged the orders dated 9-8-1983 and 18-10-1985 passed by the Collector, Central Excise, Meerut and Customs Excise and Gold (Control) Appellate Tribunal, New Delhi respectively. Copies of these orders have been annexed as Annexures 11 and 13 to the writ petition.
2. M/s. Mohd. Sharif Mohd. Amir had been carrying on a business of khandsari sugar and had obtained a central excise licence for manufacture of khandsari sugar in their factory at Fatehullahganj, Thakurdwara. They were allowed to manufacture khandsari sugar in their factory at Fatehullahganj, Thakurdwara. They were allowed to manufacture khandsari sugar under special procedure on a centrifugal machine of size 22.9. x 45.7 cms. during the khandsari season 1977-78. On 17-4-1978 the Central Excise Officer of Moradabad Division, Moradabad visited their factory at 10 30 a.m. and found the factory working, some freshly manufactured sugar was lying on the dryage plateform and partly being weighed and bagged by the labourers. On inspection of the factory premises, it was found that while centrifugal of size 22.8. X 45.6 cms. as declared installed in the factory as per their A.S.P. was neither on the foundation nor available in the factory, instead, one centrifugal of size 30.5 x 61 cms. had been unauthorisedly installed in the adjoining room closed with shutter. It was also found that molasses was dripping out of it and the sugar was still stuck in its drum as an evidence of its working and manufacturing khandsari sugar at that time. In view of the unauthorised working of the centrifugal and manufacture of khandsari sugar the entire stock of sugar, i.e., 21 bags weighing 18.85 Qtls. of Ist process and 33 bags weighing 22.57 Qtls. khandsari sugar salavat total 54 bags of 41.42 Qtls and one centrifugal of size 30.5 X 61.0 cms., unauthorisedly installed by the petitioners were seized by the preventive squad, for contravention of the provisions of Central Excise Rules, 1944 and an offence-cum-seizure case was booked against the party by the officers. Since none of the partners of the firm was present at the time of seizure, therefore, after waiting for a reasonably long time, statements of the factory employees were recorded and a panchanama was drawn in presence of independent witnesses for seizure of khandsari sugar and centrifugal of size 30.5 x 61.0 cms.
3. However, Shri Mohd. Shafiq, brother of the petitioner subsequent to the seizure filed an affidavit before the Collector of Central Excise, Allahabad claiming the ownership of the centrifugal and khandsari sugar seized by the Officers on 17-4-1978. The case was decided by the Collector of Central Excise, Allahabad vide his order in Original No. MP. 33 (78) 10 of 1979 dated 20-2-1979 and it was held that M/s. Mohd. Sharif Mohd. Amir are guilty of violation of Central Excise Rules and duty amounting to Rs. 1,14,011.01 for the entire season was demanded and a penalty of Rs. 2,000 was also imposed on the petitioner. The khandsari sugar and centrifugal seized from the factory of petitioners were also confiscated though allowed to be redeemed on payment of redemption fine.
4. Meanwhile on the instigation of the petitioner his brother Sri Shafiq filed a civil suit against the department for allegedly causing them harassment and unauthorisedly carrying away his centrifugal and the sugar. This case was decided in May, 1984 and was dismissed in default against the appellants as they failed to appear before the Court on due dates. However, the case was restored by the learned Judge on the request of the applicant but intimation of the same was not received by the department. The case as such was heard in absence of the department's pleader and decided, ex parte on 22-9-1986 against the department. Having come to know about this decision, the department immediately filed a restoration application in the Court of Addl. Civil Judge, which was aecepted on 2-1-1987 and the judgment dated 22-9-1986 was set aside.
5. It has, however, been stated that the said civil suit for declaration has now been decreed ex parte. Thereafter, the petitioner also went in appeal before the Central Board of Excise and Customs, New Delhi against the order in original dated 20-2-1979, passed by the Collector of Central Excise, Allahabad. In their order No. 206/1980 dated 9-4-1980 the Board upheld the order of the Collector, Central Excise, Allahabad and appeal was rejected. However, the party again filed a revision petition which was later on transferred to Customs Excise and Gold (Control) Appellate Tribunal, New Delhi. In their order No. ED/DEK/T/448-NRB dated 10-5-1983, the Appellate Tribunal remanded the case to the adjudicating Officer for a fresh hearing and disposal of the case after affording a reasonable opportunity to the appellant to plead their case.
6. In the de novo adjudication the Collector, Central Excise, Meerut vide his order No. 12/Collr/198.3 dated 9-8-1983 decided the case and demanded only two weeks duty one each for smaller (22.8 x 45.6 cms.) and bigger (30 5 x 61.0 cms.) size of centrifugals and imposed a penalty of Rs. 2,000 along with Rs. 1,500 as redemption fine on seized and confiscated khandsari sugar and Rs. 1,000 on centrifugal machine of size 30.5 x 61.0 cms. Thus an amount of Rs. 9,476.50 become due upon the petitioner for which a certificatation was initiated by the Superintendent, Central Excise, Moradabad.
7. By the impugned order dated 18-10-1985, the Appellate Tribunal has held that on the date of seizure, i.e., on 17-4-1978 the factory was actually working and manufacturing khandsari sugar and that the order passed by the Collector demanding the compounded duty for the relevant period and confiscating the seized goods is correct in law. However, the Tribunal reduced the amount of penalty from Rs. 2,000 to Rs. 1,000.
8. I have heard the learned counsel for the petitioners. The submission made by the learned Counsel for the petitioner is that no opportunity was given to the petitioners to cross-examine the witnesses. This assertion has however, been denied by the opposite parties in their counter-affidavit and a finding to this effect has also been recorded by the opposite parties in their impugned orders. Therefore, the plea raised on behalf of the respondents that principles of natural justice have not been followed is without substance. The other submission made by the learned counsel for the petitioner is that the findings have been recorded by the Collector because of the hostility and the case of the petitioners has been wrongly disbelieved. These pleas were also raised by the petitioners before the Appellate Tribunal and on appraisal of the evidence have been negatived by the Appellate Tribunal. It has also been found that pursuant to a Commission issued by the Civil Court at the request of Mohd. Shafiq for examination of centrifugal, the Commissioner has in his report dated 12-5-1978 stated that he saw three centrifugals, one belonging to the custodian, one of the size of 30.5. x 61.00 cms. and another hidden under debris of fuel and bagasse. It has been held by the Tribunal that there is no evidence on record to establish hostility as alleged by the petitioners. It has been held that the visit of the Central Excise Officer to the factory in April, 1978, provided separate evidence of working of the centrifugal as brought out by the records. It is further stated that the inspection NOTE dated 13-1-1978 of the State Khandsari Department Inspector had been signed by Mohd. Sharif, being one of the partners of the firm. Besides this, at the time of the visit of Central Excise Officers on 17-4-1978 they had obtained the statements of various workers who were found at the time of the visit.
9. The following findings have been recorded by the Appellate Tribunal:--
In the case of the vist of the Central Excise Officers on 17-4-1978, they had obtained the statements from the workers found handling the sugar in the factory at the time of the visit. The appellant had made a very belated attempt to counter this by producing affidavits from some of these persons during the de nova proceedings before the Collector, in 1983, which have been rightly not relied upon by the Collector, and besides, it is not solely on the labourers' statements that the case of the department is based. There is another statement of one Sri Chandra Pal Singh given on the date of seizure, recorded in the presence of two independent witnesses and this statement still stands. Further, a perusal of the affidavits of Ahmed Hussain and Chhuttan shows that they were talking with abnormal clarity about the seizure which took place about 5 years ago; both these affidavits refers to having seen seizure of two sugar machines whereas even the letters of the appellant, in response to the departmental summons indicate only one machine having been seized. The Civil Suit relied upon by the appellant does not really advance his cause as prima facie it is subsequent in point of time to the seizure and also it negatives his other version of the case having been foisted by them due to departmental hostility and there is a lost (sic) force in the contentions in this regard put forth by the learned S.D. It is clear from the evidence on record that on both the days of visit by the State Government Officers on 13-1-1978 as well as by Central Excise Officers, on 17-4-1978 the factory was in fact found working and, therefore, the Collector's order demanding compounded levy duty is correct in law.
10. From a perusal of the impugned order as well as the aforesaid findings recorded by the opposite parties and the Appellate Tribunal, I find that the said findings are based merely on appraisal of evidence and I am satisfied that no error of law is involved in the same. In the result the writ petition fails and is dismissed at this stage.