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TMI Blog1994 (1) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... erchandise Act as well as Central Excise Act and Rules. 4. The Police arrested the appellant and others and lodged an FIR and then recorded the statements of various persons. Further, it was alleged that the witnesses mentioned in the FIR have corroborated the above facts before the Central Excise Officers. 5. The show cause notice alleges contravention of Section 6 as well as Rules 174, 9, 52A and 226 of Central Excise Rules. 6. The Collector, thereafter, adjudicated the case observing that the appellant had neither submitted a reply to the show cause notice nor appeared for personal hearing, therefore, it was obvious that he was guility of carrying on clandestine business which he could not explain. And in view of the above, it was established beyond doubt that Shri Ghanshyam Agarwal was engaged in the manufacture of branded bidis and clearance thereof without payment of central excise duty leviable thereon. 7. The Collector imposed a personal penalty of Rs. 2000/- and ordered confiscation of 30 lacs seized bidis and gave an option to redeem the same on payment of a fine of Rs. 1000/- and also demanded duty on 81,66,529 bidis allegedly removed surreptitiously. 8. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aded in it. I used to sell these bidis as such (without labels to the betel shopkeepers) . 14. He also mentions there that Police came around 5 O Clock to my place on 22-8-1990 and further that they were approximately 15 Khanches and 22, 23 bags of loose bidis in my house which were taken by police. When Police had fetched the Khanches and bags of loose bidis from my house, they did not take me with them. Only this much bidis were recovered from my place Police has alleged that 18 Khanches and 27 bags of bidis have been recovered from my place. I do not know from where the remaining two Khanche and bags were recovered. The labels of Anik Masala were also recovered from my place..... I do not know anything about other labels of bidis namely Chhota Balak and Bada Balak 207, Chand Chhap 201, Jhilli paper and green paper which has also been shown by police in recovery. Neither anything was recovered from my place nor I used to do the work of labelling. I used to sell the loose bidis only. I do not do the labelling work....". 15. He had also stated that the named persons were not arrested from his house. 16. That the business of bidi was being done for the last six, seven months a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of labels were lying at the place where the labels were used to be fixed. 23. It was his contention that this witness was not reliable. He was a Peon in Arya Kanya Pathshala and it has not been stated how and why he was there, if at all at 11.00 PM in the night. 24. The reference to fake labels and fake bidis does not show and does not mean that the appellant was labelling or manufacturing such bidis. 25. Furthermore, the FIR also shows that there are 27 bags of so-called fake bidis, out of which some were completely filled with bidis and some were incomplete. 26. It was also his contention that the show cause notice for the period beyond six months prior to the service of the notice was barred by time inasmuch as the ingredients necessary for invoking the proviso have not been alleged. Furthermore, there is no evidence to show that he was carrying on the business before six to seven months. 27. It was also his contention that FIR has not been proved and as such it is not admissible in evidence. 28. It was also his contention that Hon ble A.C.J.M., Lucknow has acquitted the appellant observing, inter alia, that P.W. 1 Sheetal has deposed that no Memo was prepared in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal action could be considered on its own merit. 36. We have considered the above submissions. We observe that the information received by the Police appears to primarily relate to fraudulent unauthorised use of labels of various types in the business of the so-called fake bidis and edible masalas etc. 37. The information specifically refers to affixing labels of renowned firms, the Police had claimed seizure of the `fake bidis and `labels , Jhillis and papers etc.; and the appellant had denied it and the Bench had allowed joint inspection of the seized goods. This report shows, inter alia, that there were bidi bundles with cover of labels of 207 and 201 and one of the boxes contained labels and paper cover. 38. It appears that the Police took action as it apprehended violation of various sections of I.P.C. Since, however, it appeared to Police officials that some Central Excise Rules were also violated, they informed the Central Excise authorities who then made enquiry of their own and proceeded with the matter. 39. In view of this position, while the ld. Counsel is correct in pointing out that the Police were not authorised to seize goods or record statement under the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings before the Hon ble Magistrate were under IPC and the Police case basically related to the alleged fraud and alleged violation of Merchandise Marks Act in view of the alleged recovery of so-called fake labels or labels belonging to third parties and the so-called fake products. The prosecution was not with reference to Central Excise Act or Rules and, therefore, the learned D.R was correct in pointing out that those proceedings were independent of the proceedings under the Central Excise Law. It is noteworthy in this regard that the learned AC GM, Lucknow has acquitted the appellant of the charges under Section 420, 485 and 487 of I.P.C. and has not referred to any provision of the Central Excise Act or rules. 47. We have also gone through the statement of the appellant as well as of other persons and note the common fact that there was, in any eventuality recovery to the extent admitted by the appellant himself and that the appellant was engaged in the business of selling bidis for the last six to seven months. 48. For the period beyond this, there is no evidence of manufacture of labelled bidis as the purchases from Sagar were only those of unlabelled bidis and the bank t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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