9911796707
TMI Blog1984 (6) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... t a quantity of 60,573 Kgs. of tobacco has been removed by the company from their bonded warehouses (godowns) in contravention of Rule 9(1) of CER 1944 read with Rule 173N . He demanded duty of Rs. 3,15,767.95 under Rule 223-A. Having thus invoked the provisions of Rule 223-A, he did not pursue the demand under Rule 9(2). He felt that a deterrent penalty was called for in this case and imposed a penalty of Rs. 5 lakhs under Rule 1730(1). The company filed an appeal against this order with the Central Board of Excise Customs which found as follows in its order referred to supra :- As far as the argument that Rules 223A, 9(1) and 173Q cannot be invoked simultaneously, the Board is of the view that the warehouse of the appellants were attached to the cigarette factory and as such provisions of Chapter VIIA of Central Excise Rules would be applicable on them. The duty has been demanded under Rule 223A which provides for the same in respect of any shortage noticed in the course of annual stock-taking in a warehouse. Since there is contravention of both Rules 223A and 173Q(b) as the excisable goods stored in the warehouse were not accounted for and since in such situations where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IIA would have preponderance, the imposition of penalty under Rule 173Q is in order. This would show that the Board has upheld the penalty only in terms of Rule 173Q(1)(b) and this is the order of the Board against which the present appeal is before the Tribunal for consideration. By implication the Board has not agreed with the Collector regarding the inference of removal of goods without payment of duty referred to in Rule 173Q(1)(a). Rule 173Q(1)(b) deals with a situation where a licensee of a warehouse does not account for any excisable goods.....stored by him..... . Rule 223A refers to deficiency discovered in a warehouse being accounted for to the satisfaction of the proper officer. There is no provision in Chapter VILA for stock-taking. Stock-taking is dealt with only under Rule 223A; a harmonious interpretation of these two rules would show that the accounting referred to in Rule 173Q(1)(b) is in respect of any excess goods that may be found in a warehouse and not of shortages therein. 4. Dealing with the quantum of penalty learned advocate referred to the decision of the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa -1978 (2) ELT (J159) SC - wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself, while it does not militate against the inference which has been drawn, only strengthens it, because it shows that the relevant accounts had been manipulated to show a better ratio. Thus the Department seems to have discharged the burden of proof, bearing in mind the gravity of the issue. Following the principle adopted in the case of tea, he urged that in the present case removal of tobacco without payment of duty could be inferred according to the normal interpretation of the rules, as referred to by His Lordship. He also referred to the decision of this Tribunal in the case of Appollo Tyres v. Collector of Central Excise, Cochin - ED (MAS) No, 400/83 (Cegat) dated 24-5-1983 - where a penalty of Rs. 2000/- was upheld under Rule 173Q of the CER for a shortage in the number of tyres in the bonded store-room. (ii) The learned Senior Departmental Representative also claimed that the Board has not modified or given up the finding of the Collector as to the violation of Rule 173Q(1)(a). A reference to Rule 173Q in the order of the Board is only by way of illustration. (iii) He maintained that the quantum of penalty is not large. Under Rule 173Q the maximum penalty leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge. According to it, if the licencee of a warehouse....does not account for any excisable goods ....stored by him.....the licencee.....shall be liable to a penalty. Accounting for goods stored in a warehouse does not necessarily limit itself to accounting of an excess. It could deal with accounting for a shortage also when goods are received in the warehouse. They are entered in the relevant registers and. stored in the warehouse. The licensee has to account for what is stored as exhibited by the books of accounts. In this view we consider that Rule 173Q would cover both excesses and shortages. To the extent that shortages are covered by both Rules 223A and 173Q - though a shortage may be discovered by way of annual stock-taking referred to in Rule 223A or any other manner say a surprise challenge or check including an annual stock-taking under Rule 173Q - when read with the provisions of Rule 173A(1), Rule 173Q would prevail. We therefore consider that in the present case the provisions of Rule 173Q(1) - in particular (1)(b) - is available to the department. The order of the Collector makes a finding in respect of Rule 173Q ; the show cause notice referred to violation of Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
