1982 (10) TMI 43 - HC - Central Excise

Summary

Issues:
1. Contravention of Central Excise Rules regarding unauthorised centrifugal and Khandsari sugar production.
2. Confiscation of seized Khandsari sugar and imposition of penalty.
3. Assessment of duty and penalty by Collector.
4. Appeal against Collector's order.
5. Revision of appellate decision by Government of India.
6. Legal arguments regarding duty assessment and compliance with Rules.
7. Decision to quash duty demand on unauthorised centrifugal and remand the matter to the Collector.

Analysis:
1. The petitioner, operating a Khandsari sugar factory, was found with an unauthorised centrifugal and excess Khandsari sugar production during an inspection by Central Excise Officers. The seized sugar was confiscated, and a notice was issued for contravention of Rules 92B and 92C of the Central Excise Rules.
2. The Collector ordered the confiscation of the Khandsari sugar, imposed a redemption fine, and directed the petitioner to pay duty for the unauthorised centrifugal and additional production, along with a penalty under Rule 92E.
3. The appellate authority upheld the duty demand and penalty, noting the unauthorised use of the centrifugal and the liability to pay duty.
4. Upon revision, the Government of India affirmed the duty demand for the unlicensed centrifugal and penalty, dismissing the revision except for the duty demand on the licensed centrifugal.
5. The petitioner contended that duty was wrongly assessed for the unauthorised centrifugal as it was not under the special procedure, and the permission granted became void under Rule 92C due to non-compliance with Rule 92B(4).
6. The petitioner argued that authorities did not determine the installation date of the additional centrifugal or the actual sugar production, emphasizing the need for factual assessment before duty demand. The petitioner accepted the confiscation and penalty for unauthorised production.
7. The High Court allowed the writ petition, quashing the duty demand on the unauthorised centrifugal, and remanded the matter to the Collector for fresh proceedings in compliance with the law, without cost implications for the parties.