1991 (7) TMI 201 - AT - Central Excise

Summary

Issues Involved:
1. Confiscation of 4,80,000 sticks of Swastika Branded Biris.
2. Unauthorized removal of 3,60,000 sticks of Ma Bhabani branded biri.
3. Shortage of 94 bags of unmanufactured biri tobacco.
4. Unauthorized transport of 20 bags of unmanufactured biri tobacco.
5. Unauthorized receipt and storage of 1125 bags of unmanufactured biri tobacco.
6. Unauthorized removal of 280 bags of unmanufactured biri tobacco.
7. Removal of 1546.1 kgs of biri tobacco dust.
8. Concealment of biri tobacco using biri leaves.
9. Penal liability under various rules of the Central Excise Rules, 1944.

Detailed Analysis:

1. Confiscation of 4,80,000 sticks of Swastika Branded Biris:
The appellants were charged with manufacturing and storing 4,80,000 sticks of Swastika Branded Biris without accounting them in the statutory books as required under Rule 94 and Rule 226 of the Central Excise Rules, 1944. The appellants contended that these biris were part of a consignment for which duty had already been paid but could not be removed due to lack of space. The Collector's conclusion that the biris were intended for surreptitious removal was based on conjecture and surmises without material evidence. The Tribunal set aside the confiscation and the fine imposed.

2. Unauthorized removal of 3,60,000 sticks of Ma Bhabani branded biri:
The appellants were accused of removing 3,60,000 sticks of Ma Bhabani branded biri without payment of duty and without proper documentation. The appellants argued that duty was paid and the removal was due to technical irregularities. The Tribunal found no tangible evidence to support the charge of unauthorized removal but imposed a penalty of Rs. 1,000 for violation of Rule 52A of the Central Excise Rules, 1944.

3. Shortage of 94 bags of unmanufactured biri tobacco:
The appellants were charged with using 94 bags of unmanufactured biri tobacco to manufacture biris without payment of duty. The appellants claimed the shortage was due to non-accountal in the EB-3 register. The Tribunal held that the onus of proving clandestine removal was on the Department and mere suspicion could not replace concrete evidence. The demand for duty on the biris was set aside.

4. Unauthorized transport of 20 bags of unmanufactured biri tobacco:
The appellants were accused of transporting 20 bags of unmanufactured biri tobacco without a transport permit. The Tribunal found that the records examined by the Collector were not provided to the appellants, violating principles of natural justice. The confiscation of the 20 bags and the fine imposed were set aside.

5. Unauthorized receipt and storage of 1125 bags of unmanufactured biri tobacco:
The appellants were charged with receiving and storing 1125 bags of unmanufactured biri tobacco without proper documentation. The Tribunal found that the records relied upon by the Adjudicating Authority were not furnished to the appellants. The confiscation and fine imposed were set aside.

6. Unauthorized removal of 280 bags of unmanufactured biri tobacco:
The appellants were accused of removing 280 bags of unmanufactured biri tobacco without proper documentation. The Tribunal found that the records relied upon were not provided to the appellants. The demand for duty was set aside.

7. Removal of 1546.1 kgs of biri tobacco dust:
The appellants were charged with removing 1546.1 kgs of biri tobacco dust without proper documentation. The appellants contended that the dust was either destroyed or accounted for in AR-1 forms. The Adjudicating Authority accepted this explanation and no demand for duty was made.

8. Concealment of biri tobacco using biri leaves:
The appellants were charged with using 15 bags of biri leaves to conceal 20 bags of biri tobacco. The Tribunal found no concrete evidence to support this charge. The confiscation of the biri leaves and the fine imposed were set aside.

9. Penal liability:
The Adjudicating Authority imposed penalties under Rule 9(2) read with Rule 32(2) and Rule 151 read with Rule 226 of the Central Excise Rules, 1944. The Tribunal found that the penalties were not clearly justified except for the violation of Rule 52A, for which a penalty of Rs. 1,000 was upheld.

Conclusion:
The appeal was largely allowed, setting aside most of the confiscations and fines due to lack of concrete evidence and procedural fairness. Only the penalty of Rs. 1,000 under Rule 52A was upheld.