1987 (7) TMI 90 - HC - Central Excise

Summary

Issues Involved:

1. Contravention of Rule 32(2) of the Central Excise Rules, 1944.
2. Contravention of Rule 39 of the Central Excise Rules, 1944.
3. Alleged contravention of Rule 40 of the Central Excise Rules, 1944.
4. Imposition of penalties and excise duty.
5. Validity of the adjudication orders and subsequent appeals.

Detailed Analysis:

1. Contravention of Rule 32(2) of the Central Excise Rules, 1944:

The petitioner was found guilty of violating Rule 32(2) by removing tobacco from his licensed premises to another place without obtaining the necessary permission. Despite the petitioner's explanation that he was unaware of the requirement for such permission, the court held that ignorance of the law is no excuse. The petitioner's legal representative conceded that the petitioner had indeed contravened Rule 32(2) by shifting the tobacco without proper authorization.

2. Contravention of Rule 39 of the Central Excise Rules, 1944:

The petitioner was also found guilty of contravening Rule 39 by storing tobacco in an unlicensed premises. This was acknowledged by the petitioner's legal representative. Rule 39 mandates a true declaration of all premises used for storing, keeping, sorting, grading, manufacturing, and selling unmanufactured tobacco, and any deviation results in liability for confiscation and penalties.

3. Alleged Contravention of Rule 40 of the Central Excise Rules, 1944:

The petitioner contended that he did not violate Rule 40, which requires that no wholesale purchase of unmanufactured tobacco for trade or manufacture be made without a valid permit showing duty payment. The petitioner argued that the seized tobacco was duty-paid and was temporarily moved due to repairs. The respondents did not claim that the tobacco was non-duty-paid. The court noted that the Central Excise officers did not verify the seized tobacco against the samples drawn, which could have clarified whether it was duty-paid.

4. Imposition of Penalties and Excise Duty:

The petitioner was penalized with a fine of Rs. 25 for not maintaining up-to-date accounts and was further penalized with Rs. 500, a redemption fine of Rs. 1099.06, and excise duty of Rs. 6974.70. The court found that the Central Excise authorities had sufficient cash security to cover eventualities and that the seized tobacco was likely duty-paid. The petitioner had established that the tobacco was temporarily moved due to repairs, and the Central Excise authorities failed to verify the samples drawn.

5. Validity of the Adjudication Orders and Subsequent Appeals:

The court quashed the adjudication orders related to the recovery of excise duty of Rs. 6974.70 from the petitioner. The court directed the respondents to refund this amount to the petitioner within 45 days and prohibited further proceedings against the petitioner in this matter. The petitioner's appeal and revision applications were previously rejected as time-barred.

Conclusion:

The writ petition succeeded in part. The court quashed the adjudication orders concerning the recovery of excise duty and directed a refund to the petitioner. The respondents were instructed not to proceed further against the petitioner, and no costs were awarded.