1989 (11) TMI 187 - AT - Central Excise

Summary

Issues Involved:
1. Confiscation of 39 packages of motor vehicle parts.
2. Imposition of penalties on the appellants.
3. Compliance with Central Excise Rules, 1944.
4. Validity of gate passes and transportation documents.
5. Storage of goods in an unapproved area within the factory premises.
6. Manipulation of transportation records by the transporter and driver.

Detailed Analysis:

1. Confiscation of 39 Packages of Motor Vehicle Parts:
The Department intercepted a motor tempo carrying 26 wooden cases of motor vehicle parts on 3-7-1985 at the UP-Delhi border. The driver presented gate passes and invoices dated 30-6-1985. Further investigation revealed that the goods had actually left the factory on 30-6-1985, leading to the seizure of 26 wooden cases on suspicion of double transportation without payment of Central Excise duty. Additionally, 13 wooden cases were found in the factory's cycle stand, leading to the seizure of a total of 39 packages. The Additional Collector ordered the confiscation of these packages under Rule 173-Q of the Central Excise Rules, 1944.

2. Imposition of Penalties on the Appellants:
The Additional Collector imposed a personal penalty of Rs. 40,000/- on the appellants and appropriated a redemption fine of Rs. 35,000/- in lieu of confiscation. Penalties were also imposed on the transporter, Shri Har Charan Singh Chawla (Rs. 1000/-), and the driver, Shri Mohd. Kaleem Khan (Rs. 200/-). The motor tempo was confiscated with an option to redeem it on payment of a fine of Rs. 2000/-. The appellants contested these penalties, arguing that the goods were not removed without payment of duty or clandestinely.

3. Compliance with Central Excise Rules, 1944:
The appellants argued that the goods were cleared from the factory on 30-6-1985 and stored at the cycle stand due to a mechanical defect in the tempo. They contended that the area between gate No. 1 and gate No. 2, where the cycle stand was located, was not part of the factory under Section 2(e) of the Central Excises and Salt Act, 1944. However, the Additional Collector found that the cycle stand fell within the inclusive definition of a factory under Central Excise Law, and any storage or removal of excisable goods from this area had to be accounted for.

4. Validity of Gate Passes and Transportation Documents:
The gate passes and other transportation documents presented by the appellants were dated 30-6-1985, but the goods were intercepted on 3-7-1985 without any endorsement indicating a breakdown of the transporting vehicle. The Additional Collector found inconsistencies and manipulations in the transportation records, including discrepancies in the goods removal register, GRs maintained by the transporter, and the daily despatch statement. These discrepancies indicated that the gate passes were used a second time, suggesting illicit removal of goods without payment of duty.

5. Storage of Goods in an Unapproved Area within the Factory Premises:
The 13 wooden cases found in the cycle stand were not accounted for in the factory records. The appellants failed to explain why only 39 wooden cases were unloaded at the cycle stand when the vehicle was supposed to carry 71 cases. The Additional Collector found that the cycle stand was not an approved place of storage for excisable goods, and the appellants did not follow the provisions of Rule 173H of the Central Excise Rules, 1944, for returning duty-paid goods to the factory.

6. Manipulation of Transportation Records by the Transporter and Driver:
The Additional Collector found that the transporter and driver were involved in manipulating the transportation records. The GR No. 5093 dated 30-6-1985 was found to be manipulated, and the daily despatch statement did not tally with the carbon copy available in the factory. Contradictions were also found between the affidavit of the cycle stand contractor and the statement of the transporter. These findings led to the conclusion that the transporter and driver were guilty of contravening the provisions of Rule 52-A of the Central Excise Rules, 1944.

Conclusion:
The Tribunal upheld the findings of the Additional Collector, rejecting the appellants' contentions and confirming the confiscation of the 39 packages of motor vehicle parts and the imposition of penalties. The discrepancies and manipulations in the transportation records, along with the storage of goods in an unapproved area, led to the conclusion that the appellants were guilty of contravening the provisions of the Central Excise Rules, 1944. The appeal was rejected.