1991 (3) TMI 284 - AT - Central Excise

Summary

Issues Involved:
1. Confiscation of 100 CFCs of scissors brand cigarettes.
2. Imposition of penalty on M/s. I.T.C. Ltd. under Rule 52A and Rule 209A of the Central Excise Rules, 1944.
3. Imposition of penalty on M/s. Road Transport Corporation Pvt. Ltd. under Rule 209A of the Central Excise Rules, 1944.

Detailed Analysis:

1. Confiscation of 100 CFCs of Scissors Brand Cigarettes:
The Additional Collector confiscated 100 CFCs of scissors brand cigarettes covered under a photocopy of G.P. 1 No. 2401. The confiscation was based on the interception of a lorry carrying 400 CFCs of cigarettes, of which 100 CFCs were transported under a photocopy of gate pass No. 2401, violating Rules 9 and 52A of the Central Excise Rules. The Tribunal held that the confiscation of 100 CFCs was not in accordance with law, as M/s. I.T.C. Ltd. had no knowledge of the consignment being broken up and transported under a photocopy of the gate pass. The Tribunal set aside the confiscation, stating that the factory was under Physical Control Procedure, and the gate passes showed that the goods were transported after payment of duty.

2. Imposition of Penalty on M/s. I.T.C. Ltd.:
The Tribunal examined the imposition of penalties under Rules 52A and 209A. M/s. I.T.C. Ltd. contended that the consignment was handed over with a valid original gate pass, and there was no evidence of mala fide intention. The Tribunal found that the consignment was broken without the knowledge of M/s. I.T.C. Ltd., and the company had no reason to believe that the goods were liable to confiscation. The Tribunal cited the Supreme Court decision in Hindustan Steel Ltd. v. State of Orissa, emphasizing the absence of mens rea. Consequently, the penalties imposed under Rule 52A(5) and Rule 209A were deemed not in accordance with law and were set aside.

3. Imposition of Penalty on M/s. Road Transport Corporation Pvt. Ltd.:
The Tribunal considered the penalty imposed on M/s. Road Transport Corporation Pvt. Ltd. under Rule 209A and Rule 52A(5). It was admitted that the consignment was broken at Ichhapuram without the knowledge of M/s. I.T.C. Ltd., and transported under a photocopy of the gate pass. The Tribunal noted that ignorance and illiteracy of workers were not valid excuses to exonerate the corporation from the provisions of Rule 52A(5). However, there was no evidence that the corporation transported the goods with knowledge of their liability for confiscation, making the penalty under Rule 209A unjustified. The Tribunal modified the order, imposing a penalty of Rs. 500 under Rule 52A(5) and setting aside the Rs. 25,000 penalty under Rule 209A.

Conclusion:
The appeal by M/s. I.T.C. Ltd. was allowed, and the penalties and confiscation were set aside. The appeal by M/s. Road Transport Corporation Pvt. Ltd. was partly allowed, with the penalty under Rule 209A set aside and a reduced penalty of Rs. 500 imposed under Rule 52A(5).