GENERAL MANAGER VEHICLE Vs. CCE

JUDGEMENT

(1.) THIS appeal is filed by the G.M. Vehicle Factory, Jabalpur against imposition of penalty of Rs. 1,00,000/ - on the appellants. During scrutiny of the record of M/s. G.M. Vehicle Factory, Jabalpur, it was found that during the period from December 1994 to March, 1996, they manufactured and cleared 101 chasis for which no evidence of payment of duty was found. On inquiry, it was informed that these chasis have been sent to various job workers for building bodies thereon. The appellant could not produce any challan as required under erstwhile Rules 57F3/57F4 of the Central Excise Rules, 1944 nor they accounted for the goods entering these in the statutory records. Therefore, show cause notice was issued to them demanding duty of Rs. 42,27,499/ - and for imposition of penalty under Section 11AC of Central Excise Act beside imposition of penalty under Rule 9(1), 52A, 53, 173G, 226 and 173Q of the Central Excise Rules. The case was adjudicated by the Commissioner under the impugned order dropping the demand of Rs. 42,27,499/ -. He did not impose any penalty under Section 11AC of the Act. However, he imposed a penalty of Rs. 1,00,000/ - on M/s. Vehicle Factory, Jabalpur under Rule 173Q of the Rules.

(2.) THE contention of the appellants is that under Rule 57F(3) or 57F(4), for clearance of the inputs as such or after processing challan in prescribed proforma are required to be issued by debiting an amount equivalent to the amount of credit of duty attributable to such inputs or the inputs contained in such partially processed inputs. All the goods cleared by them were exempt from whole of the duty of excise and additional duties leviable thereon under Notification No. 62/95 -CE dated 16th June, 1995, Notification No. 63/95 and 64/95, both dated 16.3.1995 and Notification No. 70/92 -CE dated 17.6.92. Military vehicles issued by the Vehicle Factory Jabalpur to the Armed Forces whether or not fitted with weapons and parts thereof falling, under Chapter 87 under heading No. 87.10 are specialised and peculiar to the requirement of Defence Services. The same can not be called as goods since it is completely not known to the market as such and the same can also ordinarily not come to the market for being bought and sold. The claim of the adjudicating authority that non -observation of the procedure has been admitted by VFJ do not hold much water since it is settled principle of the law that admission made in ignorance of correct position of law and facts can not take the place of evidence in the course of adjudication of the case.

(3.) IT is evident that contracts for supply of inputs used in relation to manufacture of 100 Nos. of Chassis were made in the exercise of the executive power of the Union of India by VFJ and an officer of the Union of India does not have any existence independently. Hence penalty on him is not imposable.