TMI Blog1992 (6) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ariff Act, 1975. On scrutiny of the private books of accounts maintained by the appellants Company at Dhadka, Asansol, it was noticed by the Central Excise Officers that the appellants factory had removed ultramarine blue weighing 80,400.000 Kgs. contained in 1608 bags valued at Rs. 11,806,57.90 without payment of Central Excise duty leviable thereon, amounting to Rs. 1,18,065.79 from their factory to their Behala factory against Challan Nos. 1440, dated 5-3-1986; 1441, dated 6-3-1986; 1442, dated 7-3-1986; 1443, dated 8-3-1986; 1444, dated 10-3-1986; 1445, dated 11-3-1986 and 1446, dated 13-3-1986. 3. Accordingly, a show cause notice was served on the appellants dated 8-8-1986 requiring them to show cause as to -why the Central Excise duty as mentioned above should not be demanded from them under Section 11A of the Central Excises Salt Act, 1944 and why a penalty should not be imposed under Rule-1730 of the said Rules. 4. The appellants replied the above show cause notice and contended mainly that since 1976, Ultramarine Blue was not an excisable goods. They moved the Hon ble High Court of Calcutta challenging the legality of levy of Central Excise duty. But with the cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was pointed out that the clearance effected, which is the subject matter in this case, is for the period in between 5-3-1986 to 13-3-1986. It was contended that this period was after submission of the application for permission to avail of Rule 56B Procedure, which was dated 28-2-1986. In this connection, it was pointed out that there is always bound to be some gap between date of application and date of according approval by the Department. In the absence of any specific provision in die Rules, the effective date for availing of permission is the date of application. It was, therefore, contended that since the application was dated 28-2-1986 the demand of duty for the above period is not in accordance with law. It was, further, contended that semi-finished Ultramarine Blue had to be removed for packing operations from their factory at Dhadka to the factory at Behala since packing was not possible under the same roof. It was also contended that the manufacturing operation of Ultramarine Blue is complete only when packing and labelling are done and goods become ready for removal in the course of wholesale and duty is to be assessed at that point of time. Accordingly, they paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposition of penalty is in accordance with law. It was contended that for violation of Central Excise Rule 56B by removing Ultramarine Blue without getting the prior permission, the penalty under Rule 173Q of the Central Excise Rules, 1944 is rightly imposed on the appellants. He prayed for the dismissal of the appeal. 10. We have considered the submissions of both sides. In view of the above arguments the following points arise for our determination: (i) whether the demand of duty made in the impugned order is in accordance with law or not? (ii) whether the imposition of penalty on the appellants under Rule 173Q of the Central Excise Rules, 1944 is legal? . 11. As far as the point No. (i) is concerned, it is necessary for us to extract, the order of the Adjudicating Authority in this behalf. The order reads as follows :- I have carefully gone through the case records considered the submissions of the said Company. The point of issue in the instant proceedings is : whether the said Company has removed the said goods clandestinely evaded Central Excise duty thereby if so, to what extent. On scrutiny of the documents submitted by the Company in their letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the appeal memorandum. Even otherwise, the short-payment of duty is to be demanded by the Superintendent separately. But the appellants had already removed the goods from Behala factory on payment of duty in question. Therefore, the question of payment of duty when it was removed from the Dhadka Factory, does not arise the duty is not to be paid twice on the very same goods. The goods. Ultramarine Blue, is dutiable only if it was converted from semi-finished stage to the finished stage. The finished stage reaches only at Behala Factory and while removing the same from Behala Factory, the duty is to be paid and accordingly, the duty was paid by the appellants. If there was any short-payment it was for the Superintendent to recover the same as per the note made by him. It is the appellants case that after that note, that duty is also to be paid under protest. In such circumstances, the demand of duty made in the impugned order, is not sustainable and we hereby set aside the same. 12. As far as the Point No. (ii) is concerned, it was vehemently contended before us that the appellants applied for permission to remove the goods from their Dhadka Factory to Behala Factory, in te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with the statute has occurred. A penalty imposed for a tax delinquency is a civil obligation, remedied and coercive in nature, and is far different from the penalty for a crime, ...... These are the principles laid down by the Supreme Court in the case of Gujarat Travancore Agency v. Commissioner of Income Tax, reported in 1989 (42) E.L.T. 350 (S.C.) wherein their Lordships held as follows :- Page:352: Unless there is something in the language of the statute indicating the need to establish the element of mens rea it is generally sufficient to prove that a default in complying with the statute has occurred. In our opinion, there is nothing in Section 271(l)(a) which requires that mens rea must be proved before penalty can be levied under that provision. We are supported by the statement in Corpus Jurisdiction, Volume 85, Page 580, Paragraph 1023: A penalty imposed for a Tax delinquency is a civil obligation, remedied and coercive in nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws. Further, in a decision reported in 1989 (40) E.L.T. 230 in the case of Dinesh Chandra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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