9911796707
TMI Blog1989 (5) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... and non-accountal or rejected goods in RG-I as per procedure provided for in the Central Excise Rules. 2. The brief facts of the case as set out in the Show Cause notice dated 30-8-1986 issued by the Assistant Collector are that on 20-8-1986, the Customs and Central Excise Preventive staff, Patiala under the supervision of Superintendent (Preventive), Central Excise, Patiala paid a surprise visit to the factory premises of M/s. Hindustan Lever Ltd., Rajpura and found the Central Excise records written up to date. During the course of verification of stocks, quantity of 571 CB Boxes of 'Rexona' soap (sub-heading 3401/12 of Central Excise Tariff) full packed, each C.B. Box containing 144 x 100 gms were found lying in the packing shed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted under Rule 173Q of the Central Excise Rules, 1944 and why a penalty should not be imposed upon them under Rule 173 for contravention and duty of Rs. 53,335.96 P. should not be recovered from them. 4. The appellants filed their detailed explanation to the said show cause notice along with detailed affidavits of Sh. S. Dhawan, Unit Manager and of Shri Rakesh Singh Sareen, Development Manager, Soaps M/s. Hindustan Lever Ltd., Bombay along with copy of Roaster sheets. The main defence of the appellants had been that their company had paid excise duty for the year 1985 of Rs. 90 crores and that the Rajpura factory had paid in the year 1985, excise duty of Rs. 6.68 crores. That they were carrying outs its operation of manufacture of soa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of rejected goods. They further submitted that mere discrepancy or lapse of purely technical or procedural nature, which happened to be committed during the process of such exchange of rejected soaps with good quality soaps without involving any physical removal or clearance of even a single box of soap from the factory premises, no case can be lawfully made out against the appellants. They submitted that the question of clandestine removal of the said boxes of soaps from the factory premises did not arise. They further submitted that the wrong entries were on account of lack of familiarity or knowledge on the part of the employees concerned about the correct formalities and procedures required to be followed under the Central Excise Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by their employees due to lack of experience and knowledge is too expensive, harsh, arbitrary and unsustainable in law. Further, he submitted that the learned Addl. Collector of Customs having accepted the explanation of the appellants that there had been no attempt of clandestine removal of goods by the appellants, should have dropped the proceedings or at best could have administered a warning. In support of his contention, the learned advocate for the appellants cited the following decisions - 1. Hindustan Steel Ltd. v. State of Orissa -1978 (2) E.L.T. J 159 SC 2. Jay Engineering -1984 (16) E.L.T. 534 3. Kellner Pharmaceuticals Ltd., Kanpur v. Collector of Central Excise, Kanpur - 1985 (20) E.L.T. 80 The advocate for the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Panalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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