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TMI Blog1993 (4) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... nama FTK (Export quantity) cigarettes totally amounting to Rs. 48,800/- should not be recovered from them vide Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of CESA, 1944 and also why penalty should also not be imposed on them vide Rule 173Q of the Rules. Cause for issue of such a notice arose, when on 11-10-1987, noticing some suspicious movements, the Inspector of Central Excise on duty got the BSR opened, and verified the stock physically with stock recorded in RG-1 register and then once again the Superintendent with his staff, on 12-10-1987 rechecked the stock lying in BSR as also the one lying loose on production floor but duty entered into RG-1 register and found shortage of 24,000/- cigarettes from the export quality stock, and 80,000/- cigarettes from Home Consumption stock. Statements of various persons were recorded, during which the respondents raised a plea that they might have been stolen, and for that, they had already lodged a complaint with the Police. However the Chief Security Officer is reported to have stated that, close vigil was being kept against any pilferage. In reply to the Show Cause Notice, it was also pleaded that stock of the expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... theft is not a ground for remission in duty, when the demand is vide Rule 9(2) and has referred to the provisions of Rules 47 and 49, and also to the Government of India order No. 198/79 (1980 Cen-Cus 67D) and has submitted that the theory of theft clearly appears to be an afterthought, as the complaint is filed only after the shortage was detected, and that too, has not been conclusively proved, as, from the statements of the Chief Security Officer, probability of theft or pilferage has to be clearly ruled out. 6. Mr. K. Prakash Anand, the Ld. Advocate for the respondents, while supporting the order of the Collector (Appeals) has submitted that the present appeal has been filed without proper application of mind, inasmuch as, no cogent grounds are pleaded to allege the order appealed against as not sustainable. He has also pleaded that the decision of the Tribunal in Saroda Plywood Industries Ltd. v. Collector, 1987 (32) E.L.T. 116 (Tri.) referred to in the memorandum of appeal by the department, actually favours the plea of the respondents, as the said decision holds that vide Rule 49, the duty is chargeable only when the goods are removed from the factory premises, and that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Inspector from the Central Excise on duty made physical verification of stock in BSR, but nothing is from either the Show Cause Notice or from any other evidence, as to what type of suspicious movements were going on and whether any further investigations were made and if made, the outcome thereof. Two alternate conclusions therefore could be drawn (i) there was no suspicious movement, and it was just an inference of the Inspector on duty or (ii) investigations on that aspect had drawn blank. The mention of existence of suspicious movements hinted at clandestine removal, but with no outcome reported, and above two alternatives being probable, it has to be conclusively held that the department has not alleged clandestine removal, and from the finding of the adjudicating Dy. Collector, as reproduced above, he was convinced of the theft having taken place. This aspect is further clarified from the following conclusion of the Dy. Collector: The authorities in GTC Industries Ltd. were clearly aware of the possibility of the workers indulging in such petty theft and yet did not take measures to avoid such pilferage by their own workers . Thus even in Order-in-Original, which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oused goods are lost or destroyed by unavoidable accident and in series of decision, the view has been expressed that, the expression lost or destroyed in Rules 19, 49, 147, 196 is used in generic or comprehensive sense and not in a narrow sense. It postulates loss or destruction caused by whatsoever reason, whether by theft, robbery, fire or accident including pilferage or the loss over which men have no knowledge or control (Ref : Sialkot Industrial Corporation v. Union of India, 1979 (4) E.L.T. (J 324) (Delhi) Collector v. Bihar State Sugar Corp., 1985 (19) E.L.T. 179 (Tri.), Balaji and Motibhai v. Inspector of Central Excise, 1979 (4) E.L.T. (J 282) (Calcutta), Mahendra and Mahendra v. Collector 1988 (33) E.L.T. 517 (Tri.). There is also a contrary view as expressed in Collector v. International Woollen Mills 1987 (25) E.L.T. 310, but the same being of a Single Member, and when contrary view is expressed by the other Benches of the Tribunal and also by the High Courts, the majority view has to get precedence. 12. The Ld. JDR has also referred to the Government of India Order No. 198/79 in one Civil Revision Application to the effect that revision of duty on loss due to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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