TMI Blog1991 (7) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory C.E. records which resulted in recovery and seizure of 4,80,000.sticks of Swastika Branded Biris in 12 bags, 881.500 kgs. (net) of biri tobacco in 20 bags i.e. 36172.4 kgs. . (net) of unmanufactured biri tobacco 1125 bags, 885 kgs. (net) of biri leaves in 15 bags. The Central Excise Officers also detected unauthorized removal of (i) 3,60,000 sticks of Ma Bhabani branded biri in 9 bags, (ii) 8998.1 kgs. (net) of unmanufactured biri tobacco in 280 bags and (iii) 1546.1 kgs. (net) of biri tobacco dust. On further verification of the stock in duty-paid godown of the appellants the Central Excise Officers found a shortage of 94 bags of unmanufactured biri tobacco weighing 10717.5 kgs. (net) which were used by the appellants in the manufacture of 3,57,24,000 sticks of branded biris and the said quantity was removed by them surreptitiously without payment of duty and without observing Central Excise formalities. A show cause notice bearing No. V(17)2/CE/P I/WB/79 dated 26-2-1979, was issued to the appellants directing them to show cause as to why the seized goods namely, (i) branded biris, (ii) unmanufactured biri tobacco and (iii) biri leaves - should not be confiscated and why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion the impugned order was passed. It was also contended that after the seizure the Department made a roaming enquiry to fish out certain materials and such a course was not permissible. In this connection, he relied on the decision of the Allahabad High Court reported in AIR 1972 All. 231 in the case of Collector of Central Excise, Allahabad and Others v. L. Kashi Nath Jewellers. Relying on the above-said decision the learned Advocate, Shri Mukherjee contended that an indiscriminate seizure of the materials with a view to fish out materials in the form of evidence and then to justify seizure from the evidence so gathered is not permissible in law. He further relied on the decision reported in 1984 (17) E.L.T. 482. Shri Mukherjee also relied on the decision of the Supreme Court reported in 1976-SC (page-1785) in the case of Siemens Engineering Ltd. v. Union of India and Others. Relying on the above-said judgment he contended that giving reasons for coming to the conclusion is a basic principle of natural justice and every quasi-judicial authority must pass a reasoned order as otherwise it will be offending the principles of natural justice. Shri Mukherjee, therefore, contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings is to a broader notion of fairness or fair procedure in the administration as well as quasi-judicial function. It was his contention that in all such cases there is a duty cast on the quasi-judicial authority to act fairly in consonance with the rules of natural justice. Shri Mukherjee further contended that the conclusion arrived at by the learned Adjudicating Authority is not based on any evidence and it is only on assumption and conjectures. In this connection, he drew our attention to the decision of the Supreme Court reported in 1971 SC 746. In that decision it was held by their Lordships of the Supreme Court that the authorities concerned had come to the conclusion based on pure assumption and conjectures and on no evidence and on that ground alone the orders should be quashed. He also relied on the decision of the Tribunal reported in 1980 (6) E.L.T. 121 in the case of J. B. A. Printing Inks Ltd. v. Union of India and Others. Relying on the above-said decision Shri Mukherjee contended that the show cause notice must enjoin upon the party to show cause to the proper officer why he should not pay a certain stated amount which must be manifestly specified in the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed the penalty on the appellants. In this connection, he drew our attention to the impugned order-in-original and justified the arguments advanced by him. 4. We have considered the submissions made by both the sides. In order to appreciate the contentions of the parties it is necessary for us to deal with the charges and the replies furnished by the appellants and then to consider the reasonings of the Adjudicating Authority to find out whether those reasonings are reached on any material evidence or whether the contentions of the parties were examined in detail and whether the findings reached by the Adjudicating Authority are sustainable in law. 5. As far as the first charge against the appellants is concerned it has been alleged that Shri Rabindra Nath Roy, Proprietor of the appellants Company had manufactured 4,80,000 sticks of Swastika Brand hand-made branded biri valued at Rs. 4,500/- and packed them in 12 bags duly marked and numbered and kept in their non-duty paid store-room along with other non-duty paid branded biris without accounting them in the statutory books of account viz. RG-12 (Biris) as required under Rule 94 Rule 226 of Central Excise Rules, 1944. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory books of accounts as required under Rules 9(1), 52A, 9A and 226 of the Central Excise Rules, 1944. With reference to this part, the appellants in their replies stated that the Central Excise duty was duly paid on 17-1-1979 i.e. the day preceding the date of the seizure, on 100 bags of biri bearing Sl. No. 401-500 under A.R. 1 s and Treasury Challan. Due to non-availability of the proper Central Excise Officer, the goods could not be removed to duty-paid godown. Meanwhile, one of the appellants customers residing in a remote village, wanted immediate delivery of 9 bags and those were duly delivered on the strength of challan showing detailed particulars regarding payment of duty and mentioning G.P. No. 10 which was next to the number already issued. There were technical irregularities as per Rule 52A but there could not be any evasion of revenue within the mischief of Rule 9(2) of the said Rules. With respect to this part of the submission of the appellants the Collector stated that the record shows that the clearance of 91 bags of biris was allowed by the Central Excise Officer under Gate Pass No. 11 dated 22-1-1979. The challan No. 1541 dated 16-1-1979, under cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter payment of duty. The learned J.D.R., Shri Chowdhury contended that the party had not disputed the shortage of the biri tobacco in the duty-paid store-room. But they stated that it was due to non-accountal of 94 bags of biri tobacco on EB-3 account from NDP godown after payment of duty. But the same was not based on any evidence and they could not specifically indicate as to what bag Serial No. of biri tobacco on which duty was paid, was not accounted for in the EB-3 account. He also contended that they did not sell duty-paid biri tobacco to other parties and therefore, they had manufactured the biri sticks and removed the same without payment of duty. But it should be noted that under Rule 9 the onus of proving the charge of clandestine production and removal of goods without due accountal in the statutory records and without payment of duty, is heavily on the Department. The same view was taken by the Tribunal in the decision reported in 1984 (15) E.L.T. 451. It was held in that case at para-6 that the onus is on the Department to prove the same. Merely because they were not accounted in the EB-3 register it cannot be presumed that the appellants had manufactured biris from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were examined by the Adjudicating Officer should have been put to the appellants and more particularly, when he had filed the reply stating that all necessary documents were not furnished to him. If the authority was of the view that all these documents were furnished and are sufficient in order to enable him to file a reply, they should have intimated the appellants to give a final reply. In a case reported in AIR 1976 SC 143 their Lordships held that it is not necessary that the documents asked for could themselves be furnished provided the substance of those documents are furnished in the show cause notice. But their Lordships held that when the appellant asked for the original documents he should at least have been told that he had already been given a summary of the documents which were sufficient to enable him to make his representation in this behalf and he could make a fuller representation in this behalf. Therefore, the Supreme Court held that when the order was passed without giving the appellant the copies of those asked for or at least telling him that the materials already furnished were sufficient to enable him to make his representation, if he had any further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess, by the officers while making annual stock taking under Rule 223A of the Central Excise Rules, 1944. He also contended that the balance was struck althrough on the basis of officer s presumption. Endorsement in the WRG-2 Part-III dated 30-10-1978 (which is with the Department) is very material in this behalf. He also contended that the processing procedure as envisaged in Rule 143 of the Central Excise Rules read with Para-144A of the T.E.M. have been completely overlooked by the Adjudicating Authority. It was contended that the Adjudicating Authority wanted to correlate the original bag numbers with the goods lying under processing ignoring the fact that at the time of processing, originality of WRG-2 Part-I is completely lost and different serial numbers under WRG-2 Part-II are given on completion of processing for which separate stock cards maintained. It was also contended that the duty-paying documents - namely ARI No. 270 dated 10-1-1979 - Gate Pass No. 7 dated 10-1-1979, ARI-No. 275 dated 18-1-1979 - Gate Pass No. II dated 18-1-1979, Serial Nos. appearing in the assessments and clearance documents vis-a-vis those in stock and challans of the appellants were not taken int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above decision of the Supreme Court reported in AIR 1976 SC 143 the finding of the learned Collector cannot also be upheld. Therefore, the confiscation of 1125 bags of biri tobacco and allowing the appellants to redeem the same on payment of Rs. 40,000.00 are also set aside. 10. As far as 6th charge is concerned it is stated in the show cause notice that the appellants removed 280 bags weighing 8998.1 kgs. of unmanufactured biri tobacco (which were the balance of 600 bags of biri tobacco taken for processing under WRG-2, Part-II against Serial No. II/18/78) awaiting processing from their warehouse without any transport permit, without payment of Central Excise duty and without recording disposal in statutory record. The appellants stated in their reply that the correlation of the goods after processing is not possible and such type of discrepancy had crept in the total stock in non-duty paid godown. But the Adjudicating Authority had stated that on scrutiny of record it is found that 600 bags of unmanufactured biri tobacco were taken for processing in WRG-2, Part-II against Entry No. II/18/78 and after carrying out processing of 320 bags there remained stock balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bacco dust weighing 10521.600 kgs. for which they had already applied to the Central Excise Officer seeking permission for destruction. This plea of the appellants was accepted by the Adjudicating Authority and no demand of duty was made. 12. As far as the 8th charge is concerned it is stated in the show cause notice that 15 bags of biri leaves weighing 885.000 kgs. were used by the appellants for concealing 20 bags of biri tobacco weighing 881.5 kgs. in contravention of Section 119 of the Customs Act made applicable to Central Excise vide Notification No. 68/63 dated 4-5-1963 as amended. The appellants denied the above charge stating that 20 bags of biri tobacco were loaded over 15 bags of biri leaves in the lorry of WGT-335. It is stated by the Adjudicating Officer that the appellants had denied about the fact that 20 bags of biri tobacco leaves more were in the lorry. The driver of the lorry, Shri Khokan Saha in reply to the show cause notice had stated that he was given to understand by one Rajak, an employee of Roy Biri Factory that the lorry was used for carrying biri leaves only from the godown to the factory by their truck and loading of 20 bags of biri tobacco in the tru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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