TMI Blog1990 (5) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise (Preventive) Collectorate visited the factory premises of the Appellants and during the same noticed certain quantity of fully manufactured man-made fabrics duly packed and in marketable condition at various places like Bonded Store Room, Folding and Packing Section, without being entered into statutory registers. It was also reportedly noticed that the Appellants were not even maintaining lot Register prescribed by the Baroda Collectorate vide Notification No. 1/75 dated 4-1-1975. The officers, therefore, seized the said unaccounted stock but released the same subsequently on execution of B-11 Bond by the Appellants. On recording of the statements of the persons concerned, it was felt that the Appellants had contravened the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the Board directed them to approach the Collector of Central Excise, Baroda. As such, the Appellants pleaded, the Department was fully aware that the Lot-Register was not maintained pending decision on their representation and that even then, no objection was raised. In their submissions, therefore, though these were some breach of the provisions of the statute, there was no mala fide attached and that the same were never considered objectionable, even by the Department and the Deptt. acquiesed, and as such there was no ground for either confiscation or for imposition of penalty and that the duty would be paid as and when the goods were taken out of the factory premises. 3. In the adjudication proceedings that followed, the Appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... den boxes. Pleading that there is no allegation of any clandestine removal, he drew our attention to the cross-examinations of Mr. M.N. Desai, the then Superintendent and Mr. S.J. Panwala, the then Inspector of Central Excise at Surat and submitted that these two officers have admitted knowledge of the practice followed by the Appellants and that no objection thereto was raised. In his submissions, when the departmental officers had not raised any objection, thereto, the lapse, if any, ought not to be viewed seriously as to warrant confiscation of goods and imposition of penalty to the extent as is done here. He also pleaded that subsequent to the raising of the objection, they have rectified the same. He further submitted that due to some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods into boxes, is not the correct procedure and not contemplated under the Rules and notwithstanding the alleged connivance by the local departmental officers, it remains a fact that there is non-compliance of the statutory provisions, which cannot be legalised even if acquiesed by some officers. He also pleaded that non-maintenance of the Lot-register, though ordered by the authority, is a patent violation of the directions and mere representation against the same did not justify the omission in this regard. In support of his contentions, Mr. Arya placed reliance on the Tribunal decision in Bata v. C.C.E., 1986 (26) E.L.T. 401 and also to the decisions reported in 1989 (39) E.L.T. 303, 1990 (45) E.L.T. 447 and 1987 (29) E.L.T. 753. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latter than the stage when they are packed in Cellophane bags/rolls. Having not done so the appellants have already violated the statutory requirements. 9. An attempt is made to show that the practice that they were following was never objected to, and strong reliance was placed on the statements of the officers cross-examined during the adjudication proceedings. Assuming that what they have stated is true and that they had connived at the practice in all bona fide, even then that provides no justification for the breach committed by the Appellants, who, as one of the leading manufacturing concerns were supposed to know statutory requirements. At the best, the same may provide a mitigating circumstance in so far as imposition of penalty i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Southern Steel Ltd. v. U.O.I., 1979 E.L.T. J 402, where it is clearly laid down that power of confiscation under Rule 173Q did not extend to goods which were still in the factory and which had not still reached the stage of removal. It is an undisputed fact that the goods were lying within the factory premises and no attempt was till then, made to clandestinely remove the same. In view of the decision of the Andhra Pradesh High Court and reading the provisions of Rule 173Q of the Rules, therefore, the order of confiscation cannot be sustained. Significantly, the Adjudicating Authority has invoked the provisions of Sec. 173Q(1) of the Rules only and the Show Cause Notice is not issued indicating the provisions of Rule 209 of the Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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