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TMI Blog1994 (8) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... made clearances vide GP. 1 No. 66 dt. 9-5-1992, 67, dt. 9-5-1992, 68 dt. 11-5-1992, 69 dt. 13-5-1992 and 70 dt. 13-5-1992. It is alleged that no duty payment had been debited in respect of goods cleared under GP.1 No. 70 dt. 13-5-1992. It is alleged that a quantity of 8054.4 kgs. of excisable goods (LDPE Master Batches) valued at Rs. 7,67,247.50 which were physically available in the factory of the unit but which were not accounted in the Central Excise statutory records in form RG. 1. Hence, the goods had been seized under the Panchnama dt. 14-5-1992. A statement was recorded from Shri Vinodbhai Patel, Accountant of the Unit on 14-5-1992. Inter alia, he has confirmed the contents of the panchnama dt. 14th May 92. Another statement from Mr. Prakash. R. Patel, partner of the unit was also recorded on 26-6-1992. Inter alia, he had confirmed that the unit had not followed Central Excise procedure by not properly maintaining the RG. 1 stock register and he also admitted that the goods removed under GP. 1 No. 70 dt. 13-5-1992 were removed without debiting duty thereon. Thus, they had contravened the various provisions of the Excise Rules. The appellant had taken a plea in their defence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the case of Collector of Central Excise v. Techno Chem. Engineers as reported in 1990 (48) E.L.T. 401 (T) wherein the Tribunal had relied on the ruling rendered by the Hon ble High Court of Andhra Pradesh reported in the case of Southern Steels Ltd., Hyderabad v. Union of India 1979 (4) E.L.T. (J 402). They also submitted that there was no express provision for seizure of excisable goods under Central Excises Salt Act, 1944. They had also contended that Rule 173Q(1) was not applicable for the purpose of imposition of penalty and confiscation in view of the said Andhra Pradesh High Court s judgment. They had also submitted with regard to the removal of the covered goods by GP. 1 No. 70 dt. 13-5-1992 and also with regard to contravention of Rule 9(1) and Rule 173F was misplaced because Rule 9(1) was not applicable to the goods notified for self removal procedure contained in Chapter VII-A of Central Excise Rules, 1944 and also because duty payable on the goods covered by the said gate pass should have been allowed to be debited by them vide entry No. 88 dt. 13-5-1992 on 14-5-1992 before withdrawal of RG-23A Part II register by the officer. They also submitted that Rule 57G an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter Heading 3204.19 and 3206.90 and that there was no dispute regarding classification list or its approval at the relevant time and that the party had not filed appeal against the approval of the said classification list. Therefore, on this ground, he rejected the plea raised by the appellants on the question of classification and dispute is pending before the Tribunal. In this regard, he had also relied on the statement of Shri P.R. Patel, Partner of the assessee s company and also the statement of Shri Vinodbhai Patel, Accountant of the appellant company. Ld. Collector has also considered the technical details available in Mc Graw Hill Dictionary of Scientific and Technical Terms (page 908) and that of the Condensed Chemical Dictionary (10th edition of G.G. Hawley). As regards the plea of the assessee that one of the requirements under Rule 53 was the entry of the particulars shown in clauses (a) to (g) thereof. Further plea that though the columns were blank from 8-5-1992 to 13-5-1992, the particulars to be entered in such columns from 8-5-1992 to 13-5-1992 were available in GP. 1 No. 66 to 70. On this plea, the ld. Collector has held that Rule 53 prescribed daily entries and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the goods had not been accounted in the prescribed records i.e. R.G. 1 and hence Rule 173Q (1)(b) is directly attracted. The ld. Collector has relied on the ruling rendered in the case of Snack Foods (P) Ltd. v. Collector of Central Excise, Chandigarh as reported in 1987 (31) E.L.T. 231 and larger number of citations. In all these judgments, the view taken by the Tribunal is that non-entry in RG 1 Register is a contravention of the rules and confiscation of the same is sustainable. In the result, the Collector has passed the impugned order imposing the said penalties and fine as noted above for the said contraventions. 7. We have heard Shri K.A. Sindhi, ld. Advocate for the appellant and Shri Somesh Arora, ld. JDR for the Revenue. As regards the confiscation of the goods in question, the Tribunal has already decided the issue in the case of Kirit Packaging Industries (P) Ltd. v. Collector of Central Excise, Vadodara as reported in 1994 (71) E.L.T. 369. In this case the Tribunal has held that Master Batches are distinct from plain synthetic resin and plastic materials and therefore, has held that it is classified under Heading 3204/32.06 of Central Excise Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case is required to be referred to a Larger Bench for reconsideration. He submitted that the imposition of Rs. 5 lakhs penalty and Rs. 2 lakhs as predemption fine is exorbitant and beyond a reasonable limit for a contravention of a minor and venial in nature. He submitted that the goods had not attained the RG.1 Stage, as per the Chandigarh Collectorate Trade Notice No. 80/84 dt. 26-12-1984, which laid down the R.G. 1 Stage in respect of paints, Pigments and Varnishes following under the respective chapter headings. The Trade Notices had stated that the R.G. 1 Stage will be - when they have been packed into unit containers (bags in the case of certain pigments and collours). The book balance shown in R.G. 1 would include all the packed goods whether lying within or without the bonded store-room . Further reliance is placed on New Delhi Trade Notice No. 10-CE (Misc. 10)/94, dt. 4-4-1994 wherein the R.G. 1 Stage is also laid down as noted above. The ld. Advocate submitted that Rule 173Q cannot be invoked for the purpose of confiscation of goods which had not reached the R.G. 1 Stage and therefore, the extent of fine imposed for removal of goods by single gate pass where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the detailed findings in both the cases and the grounds raised before us [have] been dealt with by the Bench by a reasoned and convincing judgment. There is no need to differ from the said rulings. Applying the ratio of the said rulings, we hold that the impugned goods are classifiable under sub-heading 3204.19 and 3206.90 depending as whether they are organic or inorganic. 10. As regards the imposition of exemplary penalty of Rs. 5 lakhs for non-entry of daily register and confiscation of goods in respect of which entry had not been done in RG 1 Register and in consequence imposition of fine of Rs. 2 lakhs, we are clearly of the view that the imposition of this high penalty and fine is not in consonance with the charge made out by the department in the show-cause notice. Although we uphold the reasoning given by the ld. Collector with regard to the attraction of Rules 53 and 173Q (1)(b) with regard to the charges made out. However, we are not in a position to appreciate the imposition of such high penalty and fine in the present case. The reason being that it is not the case of the Revenue that there had been a clandestine removal or an attempt made for clandestine removal or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposition of fine in this particular case under Rule 173Q. However, the penalty of Rs. 10,000/- was reduced to Rs. 5,000/ - and fine was also reduced from Rs. 10,000/- to Rs. 5,000/-. The ld. Collector has relied on this ruling to impose the penalty but has failed to see the quantum of penalty reduced in this case to Rs. 5,000/- only. In this case, there has been a clear attempt made to remove the goods clandestinely. On the other hand in the present case, the appellants had removed the goods under gate passes and it only required entry in the RG 1 Register and hence the reliance on the Snack Foods case is mis-led. The ld. Collector has relied on the ruling of M/s. LML Ltd. v. Collector of Central Excise as reported in 1992 (61) E.L.T. 240 (All.) = 1992 (39) ECR. 16 wherein the Allahabad High Court had refused to accept a reference application under Section 35G against imposition of penalty of Rs. 30,000/- and fine of Rs. 25,000/- in respect of confiscation of 603 Scooters. Even in this ruling, the fine and penalty imposed is not exorbitant and ld. Collector has failed to see this point. The ld. Collector has relied on the ruling of Ultra Marine and Pigments Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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