SAHJANAD TOBACCO COMPANY Vs. COLLECTOR OF CENTRAL EX.

JUDGEMENT

(1.) THIS is an application filed by the applicants under Section 35 C of the CESA for the Rectification of Mistake.

(2.) SHRI G. Shiva Dass, the Id. Advocate appearing for the applicants submitted that the mistake has crept in the order as the penalty was not imposable under Rule 151 of the Central Excise Rules, on the date of issue of the show cause notice in respect of unmanufactured tobacco. Shri Shiva Dass said that show cause notice dated 29 -9 -1979 was issued to the applicants alleging shortage of unmanufactured tobacco and proposing demand of duty under Rule 160 of Central Excise Rules and imposition of penalty under Rules 32 and 151 of Central Excise Rules. On appeal filed by the applicants, the Tribunal held that no duty can be demanded from the applicants. As regards imposition of penalty, the Tribunal arrived at the conclusion that since Rule 32 of the Central Excise Rules was omitted before the issue of the show cause notice, penalty imposed under that Rule was not sustainable. However, it held that since no evidence was brought before it in support of the contention that penalty was not leviable under Rule 151, the penalty imposed under Rule 151 is maintainable in law. The Id. Advocate submitted that since show cause notice in this case has been issued on 29 -9 -1979 proposing imposition of penalty under Rule 151, when the said rule was not applicable to unmanufactured tobacco, accordingly penalty under Rule 151 is also not sustainable. He contended that in terms of Rule 139 of Central Excise Rules, the provisions of Chapter VII including the provisions relating to removal of the goods from one warehouse to another would apply to those excisable goods to which they are extended by the Central Government in the official Gazette. Unmanufactured tobacco was covered by the provisions of Chapter VII by Notification No. 82/77 dt. 4 -5 -1977. However, the said Notification 82/77 was rescinded by Notification 39/79 dt. 1 -3 -1979. He argued that since the mistake has crept in the order and this being a mistake apparent on the record, the same requires to be rectified. In support of his contention, he referred to the following decisions:

(3.) SHRI M.K. Jain, the Id. SDR while countering the arguments submitted that this plea raised by the other side was neither raised nor considered at the time of passing the order. He said that the matter raised by the applicants is also contentious issue and it cannot be said that provisions of Rule 151 were not applicable on the date of issue of show cause notice and the period involved in this order.