BIL METAL WORKS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE brief facts of the case are appellant manufactures Auto Parts falling under sub -heading No. 8708.00 of Tariff Act, holding L -4 Licence No. 23/AOG/79 of Central Excise. On 22.7.91 the Central Excise Officers of Range VI Divn. II, Vadodara during Transit check near Atladra Octroi Naka, intercepted a tempo with Registration No. GJ -6 -T -5123, and verified the documents and noticed 16 wooden boxes were in conformity with Gate Pass No. 152 dated 20.7.91, and on verification of delivery note no. 489 dated 20.7.91, Six packages consisting some samples were being carried without any valid Central Excise Documents. Driver of the Tempo Sri Ashok Kumar Shah on enquiry stated that he had been to appellant factory at about 4.30 hours. On verbal request of Sri Omprakash Singh being a part loading contractor, and on verbal request of owner M/s. Radhashami Transport for lifting the above goods and to unload at Harni Octroi Naka, he brought them. For further probe, they visited appellant factory, and found it was closed on a weekly holiday. Security staff, on enquiry stated that no body was available to explain thoroughly about the matter and they had been directed by the management to get the tempo loaded for despatch of said goods and they had been given GP No. 152 dated 20,7.91 and delivery challans on 485 to 489 dated 20.7.91 and also followed by a Inspection Report dated 19.7.91 and Chit No. 78 of 20.7.91. It gave doubt about of genuineness of such type of removal as overwriting, Scoring was made, in the chit. They brought the Tempo alongwith goods to Headquarters office of Central Excise and detained by Superintendent, Central Excise (Preventive) Headquarters, Baroda for further investigation after recording the statement under Section 14 of Central Excise Act of the above tempo Driver on 23.7.91, after physical verification of goods loaded in the tempo, Panchanama was drawn in the presence of PH. Patel, Accounts Assistant of appellant factory. It was noticed that goods mentioned in GPI No. 154 dated 20.7.91 and delivery challan were found tallying with actual description. But, six cartoons mentioned at Sr. No. 5 and 6 in the Annexure of Panchanama were found without Central Excise documents for clearance of said goods from the factory. Sri Patel produced GPI No. 159 dt. 22.7.91 for these goods before Panchas. His statement under Section 14 of Central Excise Act was recorded. Itrevealed excisable goods valued at Rs. 1,17,533.50 along with tempo valued Rs. 3,00,000.00 were seized under Panchanama dated 24.7.91 in the presence of J.M. Shah, Senior Manager (Administration) of appellant factory and Excise Assistant Sri PH. Patel, under a reasonable belief that the said goods are of an offending nature and liable for confiscation under Central Excise Law. Subsequently they were handed over under the Supratnama of same date to appellant unit. Both the goods and tempo were provisionally got released under B -l 1 Bond for Rs. 1,17,533.50 and Rs. 3,00,000 backed by cash security of Rs. 29,300 and Rs. 30,000 respectively, by the appellant factory. From the above, it is revealed that appellant factory had despatched Excisable goods on 22.7.91 under GPI No. 154/20.7.91, which showed that there was double transaction on 20.7.91 and 22.7.91 under the above GPI, and had cleared Excisable goods (6 cartons) with GPI, subsequently produced on 23.7.91 and Excisable goods were removed in Tempo seized, which was found to be engaged in carrying of Contraband offending goods. Show cause notice was issued to appellant factory on 20.1.92 for contravention of Rule 52A, read with Rule 173G(4) of Central Excise Rules, calling upon to show cause, why the goods seized as described above, should not be confiscated under Rule 173Q(1) of Central Excise Rules, penalty should not be imposed on them under Rule 173Q(d) of the Central Excise Rules 1944, and why seized Tempo No. GJ -6 -TJ123 belonging to Ashok Kumar Motilal Shah of Vadodara should not be confiscated under Rule 173Q of Central Excise Rules. Appellant replied it on 17.6.92. Personal hearing was held on 21.12.93. Sri. K.R. Korde, Central Excise Consultant, appeared for appellant filed his written submission and also argued the case. The Order -in -Original was passed after going through all the available material on record, on 31.1.94 by Assistant Collector of Central Excise, Div. II, Baroda, confirming the show cause notice, and confiscated the goods valued Rs. 1,17,533.50 under Rule 173Q with redemption fine of Rs. one lakh, and imposed penalty of Rs. 3 lakhs under Rule 173Q on the appellant, and confiscated the Tempo No. GJ -6 -T -1523 under Rule 173Q with redemption fine of Rs. one lakh to be paid by owner Ashok Kumar Motilal Shah under Section 115(2) of the Customs Act read with Section 34 of Central Excise Act. The appeal preferred against the above order was dismissed under the impugned order, after hearing the appellant and perusing all the material available. Hence this appeal.

(2.) PERUSED the Show cause, Reply and GP's, Panchanamas, Statements under Section 14 of Central Excise Act, Documents produced, Orders of Lower Authorities, Appeal memorandum Synopsis. Heard Sri D.H. Shah, learned Counsel for appellant and Sri A. Chopra, learned JDR for Respondent. Their contention are taken note of, and discussed below in the light of documents available on record. The competence of Assistant Commissioner and Jurisdiction to adjudicate is not pressed in the appeal. The above paras disclose the department's case. The defence of appellant in response to it, as per reply to show cause notice, written submissions, appeal memorandum and synopsis and arguments, is that "they manufacture mainly of deep drawn pressed Motor Vehicle parts for supply to original equipment manufacturers, and parts are fabricated as per the customer's requirement and are supplied to them as per their despatch schedule. Customers are from Zahirabad, Andhra Pradesh, Bombay, Igatpuri and Nasik (Maharashtra), Pithampur, Indore (M.R), Calcutta (West Bengal) and Madras. The seized goods were urgently required by M/s. Mahindra Nissan Allwyn Ltd., Zahirabad (A.R), as per their RO. No. 594/0 dt. 1.4.91, showing rates, terms and conditions etc. of purchase, Delivery schedule: May/June 1991, July/August 91, Telegram dated 11.6.91 for despatch of materials as critical position has arisen, and deletion of one item of material from Import List, Telegram dated 11.7.91 for urgent despatch as committed to Mr. Ravindra Kumar during his visit to BMW. Allegation of double despatch in Page 3, Para 12(1) of show cause notice is on hypothetical basis without any independent evidence. In Automobile Industry, the automobiles come into final existence when all the required parts/accessories are assembled in line assembly. Line assembly will come to a halt at the stage where the part required at that stage is not available. Suspicion is no proof. Due to rainy reason (sic) [season], Jyoti Transport Co. (commission agent for arranging transport with truck owners) could not arrange for vehicle, although promised. It is difficult to get a transport vehicle with national permit for transporting through states to Zahirabad, where there is little hope to get another consignment for Transport to other places in his emplty (sic) [empty] vehicles for truck owner. Dealing assistant cancelled the Gate Pass when it could not be transported on 20.7.91 and issued fresh one after receipt of Transport vehicle in the factory itself. Issue of hypothetical double transportation could not have arisen. If he had acquired knowledge and acted wisely, factory would not have required to pass through such an unwarranted ordeal. Evidence has to be interpreted in true spirit and drop allegation of double transportation. While giving seized goods, under supratnama, in the presence of Superintendent and I/C Inspector, original Gate Passes were withdrawn, and advised to issue fresh gate pass. Accordingly, material were despatched after execution for transport of the said goods showing thereon payment particulars as per old GPI is withdrawn. B 11 bond backed by cash security is as under old GPI No. 154 dt. 20.7.91 and 159 dt. 22.7.91 with new GPI No. 181 dt. 9.8.91 and 182 dated 9.8.91, which reveals basic duty and special duty was paid under original GPI 154 and 159. But further special duty was paid at 5%, since it was raised from 5% to 10% with effect from 25.7.91. Allegation of double transaction is not sustainable. Appellant factory is near Atladra Jakat Naka. To enter Baroda Municipal Corporation and deliver it to Octroi Naka (Harni) transit gate pass has to obtained, and to support that goods have left the BMC limit. In addition, a declaration in Form 45C under State Sales tax rules was given to the check -post while leaving Gujarat State limit.

(3.) REGARDING clearance of samples without Gate Pass, they were transported under GPI No. 182 dated 9.8.91. Mistake on the part of dealing assistant may not be interpreted to such an extent of clandestine removal. Allegation is not sustainable. Contraband offending goods were covered by relevant documents. There is no positive evidence to support the allegation. Due to less knowledge of Excise Rules and Regulations of dealing assistant, factory has to face an ordeal, without remote intention of evasion of duty, on the part of appellant. Proposal of imposition of penalty and confiscation of goods is not sustainable, as clandestine removal is based on hypothetical basis. Token penalty would serve the purpose of Justice, as per Tribunal decisions , A Subramaniam u. Collector. If show cause notice is not dropped cross -examination of Inspector Mr. Takalkar and Mr. Bhalla regarding the document seen by them on 22.7.91 and permit to go through relevant diary for the purpose, is sought in personal hearing. Mr. Ramesh M. Jani, Supervisor will be produced for evidence. Six sample pieces of Auto parts valued at Rs. 1296.12 was transported without GPI, duty involved is only Rs. 272.00, which was given later on, and fresh GPI was prepared and sent with goods. There is no allegation in show cause notice that appellant has removed excisable goods twice under one and same GPI. Adjudicating authority has traversed beyond show cause notice. Seized goods are duty paid. Confiscation will not sustain. Evasion of Rs. 272 duty on 6 samples is unbelievable. If the removal had taken place on 20.7.91, same goods and same document could not have been found on 22.7.91. Imposition of Rs. 3 lakhs penalty under Rule 173Q, 3 times the value of goods, is illegal, as admittedly seized goods are duty paid, and 6 samples were worth Rs. 1296.12. According to JDR, as per Page 4 of Impugned order, GPI152 is used thrice. 16 items were not accompanied by any gate pass. According to the learned Counsel for appellant, no duty is demanded for 3 times user of GPI.