1982 (8) TMI 60 - HC - Central Excise

Summary

Issues:
Challenge to orders of Assistant Collector, Appellate Collector, and Union of India regarding seizure of goods for alleged breach of Central Excise Rules.

Analysis:
The petitioner, a Rolling Mills engaged in rolling billets into circles and sheets, challenged the seizure of goods by the Assistant Collector, Central Excise, based on alleged breach of Rule 173-G(4) of the Central Excise Rules, 1944. The petitioner argued that the rule did not require immediate entry of raw materials upon receipt, thus goods were not liable for seizure. However, the court noted that maintaining accounts of raw materials is crucial for checking excise duty evasion, and the rule mandates entering raw materials before starting manufacture. The court found the petitioner's explanation for not entering raw materials unconvincing, as it indicated an intention to evade duty. The petitioner's argument that lack of specific instructions on maintaining accounts absolved them of breach was rejected, emphasizing the rule's purpose of preventing duty evasion.

The petitioner also contended that 189 billets not used in manufacturing should not be subject to seizure. However, the court held that even if not consumed, these billets were part of the manufacturing process and their omission from accounts indicated an intent to evade duty. The court highlighted Rule 173-Q, which allows confiscation of goods if rules are contravened with intent to evade duty. In this case, the circumstantial evidence pointed to an intention to evade duty by not showing raw materials in the accounts, justifying the seizure.

Ultimately, the court dismissed the writ petition, upholding the orders of the Excise authorities. The court found no error in the authorities' conclusion that the petitioner breached the rules with the intent to evade excise duty. The judgment emphasized the importance of following excise rules to prevent duty evasion and affirmed the legality of the seizure based on the evidence of intentional non-compliance with accounting requirements.