9911796707
TMI Blog1962 (3) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... the commencement of the crushing season and May 7, 1957, 11,606 maunds of sugar have been short accounted for. On the basis of this report a show cause notice was issued to the appellant and after hearing its representative the Collector of Central Excise, Allahabad, passed an order on February 19, 1958, requiring the appellant to pay duty on 11,606 maunds of sugar at the rate of Rs. 5-10-0 per cwt. In addition, he imposed a penalty of Rs.2,000/- on the appellant for not maintaining the accounts correctly and in the manner prescribed by Rule 83 read with Rule 226 of the Central Excise Rules, 1944. Against this order, the appellant preferred an appeal before the Central Board of Revenue under Section 35 of the Act and asked for a personal hearing. After granting it and hearing the appellant's representation the Board dismissed the appeal. It then preferred an application for Revision before the Central Government under Section 36. This application was dismissed on November 17, 1959. After that the appellant sought special leave to appeal from this Court under Art. 136 of the Constitution which having been granted, the appeal has come up before us. 3. What is urged on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Central Sugar factories for periodical/monthly manufacturing reports under Rule 83, the relevant portion of which runs as follows : * * * * 5. It is common ground that under the rules framed under the Act, a Resident Inspector is posted in every Central Sugar factory. The sugar is filled in gunny bags after being duly weighed which are kept in the godown. Appropriate entries are made in the godown register. It is also not disputed that nothing is allowed to go out of the factory without the knowledge of the Resident Inspector and without obtaining a gate pass. All the bags going out of the factory are weighed in his presence. 6. It is, therefore, contended on behalf of the appellant that it cannot be held guilty of short accounting of sugar unless it is established that any part of the sugar manufactured in the factory has been removed from the factory or there were some loopholes in the working of the factory which provide opportunities for clandestine removal of sugar. The only basis for the finding arrived at by the Collector, it is pointed out, was that provided by the calculations made by the Assistant Chemical Examiner. These calculations were attacked on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0296 mds. 100 100 Taking the net mixed juice per cent came to date as 87.36, this works out equal to 100297 x 100 =114800 maunds of cane. 87.36 Taking 10.11% as to date recovery % cane this loss is equivalent to. 114800 x 10.11 = 11606 mds. of sugar. 100 Thus it appears that there is short accounting of sugar at least to the extent of 11,000 maunds. Hence the factory is liable to be charged for submitting wrong data of mixed juice in Central Excise record. For this, the factory may be asked to explain and justify on scientific basis the short accounting of 11,000 maunds sugar. If no satisfactory explanation is forthcoming then they are liable to be charged for reporting less quantity of recoverable sugar." 7. Now, these calculations certainly involve some assumptions. The first is that the difference of 56 maunds noticed by the Assistant Chemical Examiner during the two and quarter hours test conducted by him on May 7, 1957 was uniform for every 2-1/4 hours working throughout the working hours of the crushing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nferential and based upon a factor which was first evolved in 1921 by one Noel Deer by taking average of number of analysis conducted by him. They point out that as the juice in cane is not uniformly distributed in the pith and the rind, the resultant juice by different milling procedures cannot be the same, or in other words it cannot be presumed to hold a constant and definite ratio to the brix of the first expressed juice. According to Noel Deer, the ratio between the brix of absolute juice and primary juice is 0.975. They point out that in a given case the proportion between the two would depend upon two factors, the fibre percentage of the cane and milling performance. Then they proceed to say : "Fibre per cent cane in Java used to be about 12.5 while in India it is mostly about 16. Indian cane thus has thicker rind and less of pitch. Pitch contains richer juice and the rind contains only protoplasm water. Hence, the absolute juice factor of 0.975 is not absolute for its application under Indian conditions particularly in our case and that is why no reference has been made and no cognisance taken by Sugar Technologists. Association of India regarding its application for infer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counting" on their part in showing the weight of mixed juice on an average of 7.5 tons and that their only plea was that this was not intentional or deliberate nor did it signify any mala fides on their part. No reliance has, however, been placed upon this confession in the Respondent's statement of the case. We may however point out that the gross annual turnover of sugar manufactured in the factory is in the neighbourhood of 12 lakhs of maunds and the amount of excise duty the appellant pays to Government runs into about a crore of rupees per annum. It would therefore be a little far-fetched to infer that what happened at the time of the inspection was something more than an error occasioned perhaps by carelessness nor could it be said that this shows that there was a deliberate attempt on their part to evade payment of duty on a mere 11,606 maunds and amounting to less than a lakh of rupees. We are saying this not because an error due to carelessness in maintaining the registers properly as required by Rule 83 does not amount to a contravention of that rule; the only reason why we mention this is that in a factory where the turnover of sugar is so considerable and the operations ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
