1980 (2) TMI 84 - HC - Central Excise

Summary

Issues Involved:
1. Validity of the penalty imposed under Rule 151(c) of the Central Excise Rules.
2. Liability for payment of duty for 464 bags of tobacco.
3. Proper consideration of the revision petition by the Government of India under Section 36 of the Central Excises and Salt Act.

Analysis:

1. Validity of the Penalty Imposed Under Rule 151(c):
The learned single Judge vacated the direction contained in the order Ext. P7 imposing a penalty of Rs. 2,000/- on the petitioner-firm under Rule 151(c) of the Central Excise Rules. The appellate and revisional orders were also consequently modified to the said extent. The court held that the petitioner removed the 570 bags of tobacco from his bonded warehouse in Cochin only on the strength of permits issued by the authorities under the Rules. It was concluded that there was no removal of goods from the warehouse by the petitioner otherwise than in accordance with the Rules. The court rejected the contention that the removal should be considered unsupported by authorities if the goods were not subsequently re-warehoused at the destination. Rule 151(c) applies only if the removal is made otherwise than as provided by the Rules. The learned Judge was deemed correct in holding that the Collector acted illegally and without jurisdiction in imposing the penalty.

2. Liability for Payment of Duty for 464 Bags of Tobacco:
The learned single Judge elaborately examined the contentions and evidence on both sides, ultimately concluding that the revisional authority had not properly approached the case. The revisional authority's order Ext. P11 was set aside, and the Government of India was directed to consider the matter afresh in accordance with law. The court noted that the revisional authority must examine the legality, propriety, and correctness of the findings of fact entered by the appellate and revisional authorities. The revisional authority is bound to consider the matter and write a speaking order recording its conclusions and reasons in support thereof. The order Ext. P11 did not satisfy the requirement of a "speaking order," leading to its quashing.

3. Proper Consideration of the Revision Petition by the Government of India:
The revisional authority's order Ext. P11 was criticized for its summary disposal and failure to consider the crucial facts and circumstances. The court emphasized that under Section 36(2) of the Act, the revisional authority must examine the correctness, legality, or propriety of the decision or order passed by the Appellate Authority. The revisional authority must render justice between the parties by examining the findings of fact and writing a speaking order. The court clarified that the revisional authority is free to dispose of the revision petition afresh and arrive at its own conclusions on the questions of fact, untrammelled by any expressions of opinion contained in the judgment of the learned single Judge.

The writ appeal was disposed of with the confirmation of the learned single Judge's judgment, quashing Ext. P11 and directing a fresh disposal of the revision petition by the Government of India in accordance with law. The parties were directed to bear their respective costs.