TMI Blog1981 (1) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... hiana) in the garb of M.S. flats of m,ore than 5mm thickness and thereby it was alleged that the appellants had short paid Central Excise duty to the tune of ₹ 30997.928 on the said goods. 3. This allegation was based on the enquiries that Central Excise Officers made when they visited the premises of the above said cycle part manufacturers on 31-8-1977 when it was revealed that they had purchased Iron and Steel flats of less than 5mm in thickness from the appellant firm. 4. For this infraction of Central Excise law the Collector apart from demand of differential duty at appropriate rate on 307.3000 M.T. of such goods, also imposed a penalty of ₹ 10 lakhs on the appellants under Rule 173Q of Central Excise Rules, 1944. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Singh, partner of the appellant firm appeared for personal hearing before the Board on 29-11-1980. 11. In reiterating the written submissions in the memorandum of appeal the appellants stressed that the demand of duty and penal action against the appellants without any corroborative evidence was unjustified. 12. During the personal hearing, the appellants further urged that if (according to the show cause notices) the allegation was based on some information that the appellants were engaged in the manufacture of M.S. flats of below 5mm in thickness but were showing and clearing the same in their gate passes as M.S. flats of above 5mm in thickness, it was obligatory on the part of the Central Excise officers to keep surveillance and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts was unwarranted. 18. The Board is also constrained to observe that in a case of this nature built up on unsupported statements, recorded after a long period of 1 to 2 years of the removal of the goods from the factory of the manufacturers, the imposition of massive penalty of ₹ 10 Lakhs, particularly, when the alleged evasion of differential duty was only about ₹ 30,000/ shows that the powers under Rule 173Q, were not used discriminately by the Collector, and smacks of cruelty. 19. The Board finds that the allegation against the appellants is no-established, and accordingly the orders regarding demand of duty and imposition of penalty are set aside. 20. As a result, the appeal succeeds in full. - - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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