1987 (3) TMI 204 - AT - Central Excise

Question whether procedural breach committed by respondent substantive or technical is question of fact and not referable

Summary

Issues:
1. Interpretation of Rule 49(1) of the Central Excise Rules regarding destruction of excisable goods without proper permission.
2. Extending remission of duty to a respondent who disregarded Central Excise law and procedure.
3. Deliberate violation of Rule 49 and reduction in penalty by CEGAT.
4. Comparison with a previous decision and application of Supreme Court judgment.
5. Compliance with the second proviso to Rule 49(1) of the Central Excise Rules.
6. Obligation to seek permission for destruction of goods under Central Excise law.

Analysis:
The judgment involves various questions of law raised by the Collector regarding the destruction of excisable goods without proper permission under Rule 49(1) of the Central Excise Rules. The Collector questioned whether the destruction without fulfilling conditions imposed by the Central Excise authorities but with the permission of the U.P. Excise authorities constitutes a violation. The issue of extending remission of duty to a respondent who did not comply with Central Excise law and procedure was also raised. Additionally, the deliberate violation of Rule 49 and the reduction in penalty by CEGAT were questioned. The judgment compared the present case with a previous decision and the application of a Supreme Court judgment, emphasizing the importance of compliance with Rule 49(1) and the second proviso. The obligation of seeking prior permission for the destruction of goods under Central Excise law was also a significant issue.

The learned SDR representing the Collector argued that the Tribunal's decision contradicted a previous case with similar facts. He highlighted the importance of compliance with Central Excise law and procedure, emphasizing the need for proper permission before destruction of goods. The SDR pointed out the reliance on a Supreme Court judgment regarding substandard goods and scrap, emphasizing the relevance of following procedural requirements.

On the other hand, the Advocate for the respondent argued that most of the questions raised were factual rather than legal. He contended that the Tribunal's application of the Supreme Court judgment was incorrect, as it pertained to scrap or waste during the manufacturing process, unlike the case at hand involving deteriorated molasses. The Advocate emphasized that the Supreme Court judgment did not interpret Rule 49(1)'s second proviso, which was crucial in this case.

The judgment analyzed the questions raised and differentiated between questions of fact and law. It considered the peculiar facts of the case, noting that the respondent had informed the Central Excise authorities about the goods' condition. The judgment also addressed the comparison with a previous decision and the application of the Supreme Court judgment, ultimately rejecting the reference applications. It concluded that the Supreme Court's judgment did not apply to the present case involving unfit molasses, and compliance with Rule 49(1) was crucial in determining duty liability.

In conclusion, the judgment provided a detailed analysis of the legal issues raised by the Collector regarding the destruction of excisable goods and the application of Rule 49(1) of the Central Excise Rules. It clarified the distinction between questions of fact and law, emphasizing the importance of compliance with procedural requirements and the specific provisions of the rule. The judgment ultimately rejected the reference applications, highlighting the significance of following Central Excise law and obtaining proper permission for the destruction of goods.