1984 (8) TMI 334 - AT - Central Excise

Issues Involved:
1. Defect in the appeal due to improper signing of the memorandum of appeal and letter of authorization.
2. Alleged contravention of Central Excise Rules by the respondent in removing molasses without payment of duty.
3. Compliance with Rule 149 of the Central Excise Rules, 1944 regarding the destruction of unusable material.

Issue-wise Detailed Analysis:

1. Defect in the Appeal:
At the outset of the proceedings, it was noted that the memorandum of appeal had not been properly signed. Specifically, there were no signatures at the designated places after column No. 10 and in the verification section. Additionally, the letter of authorization attached to the appeal was not signed by the Collector of Central Excise, Patna, though it was attested on the left side under sub-section (2) of Section 35B of the Central Excises and Salt Act, 1944. The appellant argued that the signatures by the Additional Collector were sufficient to comply with the provisions of sub-section (2) of Section 35B. The tribunal held that the appeal was filed correctly in accordance with the relevant provisions and that the signing error was a bona fide mistake.

2. Alleged Contravention of Central Excise Rules:
The respondent was accused of contravening Rules 9(1) and 149 of the Central Excise Rules, 1944 by removing 10,945.68 quintals of molasses without payment of duty. The jurisdictional Inspector of Central Excise raised a demand for Rs. 34,478.89 under Rule 9(2) and issued a show cause notice for imposing a penalty under Rules 9(2) and 173Q. The respondent contended that the molasses were stored in open kutcha pits due to space shortage and were destroyed with the approval of the Molasses Commissioner after undergoing chemical tests. The destruction was supervised by the State Excise Department and reported in the RT-12 return. The Assistant Collector rejected the respondent's contentions, confirmed the demand, and imposed a penalty.

3. Compliance with Rule 149 of the Central Excise Rules, 1944:
The tribunal noted that the respondent did not follow the mandatory provisions of Rule 149, which required destruction of goods in the presence of a Central Excise officer. The destruction was carried out in the presence of the State Excise Superintendent without informing the Central Excise authorities. The tribunal referred to a previous judgment where destruction in the presence of Central Excise authorities was accepted. However, in this case, the destruction was done without such compliance. The tribunal held that the order passed by the Collector (Appeals) was not correct in law and restored the demand of Rs. 34,478.89. The penalty of Rs. 2,000 under Rule 173Q was quashed due to the peculiar circumstances of the case.

Cross-Objection:
The respondent filed a cross-objection supporting the order passed by the Collector (Appeals). No new issues were raised, and both parties had no objection to its disposal. The cross-objection was dismissed.

Conclusion:
The tribunal concluded that the appeal was properly signed despite the initial defect, the respondent failed to comply with Rule 149 regarding the destruction of molasses, and the demand for Rs. 34,478.89 was restored. The penalty of Rs. 2,000 was quashed, and the cross-objection was dismissed.

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