1999 (3) TMI 428 - AT - Central Excise

Summary

Issues:
1. Liability to duty on unmanufactured tobacco removed without payment of duty.
2. Liability to penalty for various acts relating to receipt and removal of consignments.

Issue 1: Liability to Duty on Unmanufactured Tobacco:
The appeal involved two main questions: duty liability on unmanufactured tobacco removed without payment and penalty for acts related to consignments. The appellant argued that duty recovery should follow Rule 9A(5) as it stood when the notice was issued. The Collector, however, contended that an amendment to sub-rule (5) of Rule 9A mandated applying the duty prevailing on the date of notice issuance or payment. The Tribunal held that Rule 9 is substantive, not procedural, and amendments do not operate retrospectively. As the duty rate was nil from 1-3-79 onwards, no duty was payable, making the demand unsustainable.

Issue 2: Liability to Penalty for Various Acts:
Regarding penalty imposition, the appellant argued that if no duty was payable, no penalty should be imposed. The Tribunal referred to a Supreme Court judgment stating that penalty could only be imposed if the duty demand was sustained. However, procedural contraventions were alleged, and penalty could be imposed independently of duty payment. The Tribunal noted that penalty for each specific contravention could not be imposed and reduced the total penalty from Rs. 40 lakhs to Rs. 6000, considering the maximum penalty imposable under different rules. The appeal was allowed in part with consequential relief granted.

In conclusion, the judgment addressed the issues of duty liability on unmanufactured tobacco and penalty imposition for various acts related to consignments. It clarified the application of rules, amendments, and the independence of penalty imposition from duty payment. The penalty amount was reduced based on the maximum imposable penalties under different rules.