9911796707
TMI Blog1981 (5) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... al, Commercial Manager of the appellant firm. 3. In reiterating the submissions made in the written memorandum of appeal, the Advocates drew attention to the fact that the Collector had erred in holding that the entire proceedings culminating in the judgment of the Karnataka High Court in Writ Petition Nos. 2403 to 2410 of 1972, dated 7-2-1975 delivered by a Division Bench. Consisting of P.M. Chandrasekar J. and V.S. Nelimath, J. had become Non-est in view of the Judgment of the Supreme Court in C.A. 1852 to 1859/75 dated 4-3-1976. 4. On carefully going through the records of the case, the Board finds that this view is sustainable. 5. In fact, for a proper understanding of the case, the Board finds it useful to quote from the judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Deputy Collector were dismissed by the Government of India. 7. The case of the Company, as put forth in these petitions, is briefly as follow : The company purchases unmanufactured leaf tobacco and manufactures therefrom cigarettes. Unmanufactured leaf tobacco, is, in the first instance cut and thereafter such cut tobacco is processed and reeled into cigarettes rods which are cut into different sizes, packed and sold in the market. In the process of manufacture, a small proportion of cut cigarettes will be found damaged or contaminated and unfit for human consumption. Such damaged or contaminated cigarettes are rejected and not sold by the Company. One of the ways in which cut cigarette rods are contaminated in the course of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Central Excise authorities. 8. The case of the Respondents, as put forth in their common statement of objections, is briefly as follows : Oily cigarettes do not cease to be cigarettes if they do not reach the market. Even if the cigarettes destroyed by the Company were oily cigarettes, they were liable to excise duty. Hence, the company was liable to pay excise duty on the cigarettes destroyed by it. Even during the period 1-8-1968 to 1-1-1971 any destruction of cigarettes should have been carried out after previous intimation to the Central Excise authorities and under their supervision. As the Company had not carried out destruction of cigarettes accordingly, it had contravened the rules under the Act and hence was liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unfit for human consumption and do not come to the market to be bought and sold, cannot be regarded as cigarettes for the purpose of levy of excise duty. 12. Even assuming without admitting that the Judgment of the Karnataka High Court had become non-est as held by the Collector, the Advocates stated, the same could be taken up from the point it has been by the Collector, namely the observation of the Supreme Court, to the following effect : We are not called upon to express our opinion and the correctness of the Judgment because the said Judgment is hereby set aside by the consent of the parties and the Appeals are disposed of under the following manner: The respondents will produce all materials with regard to the subject mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the observations of the Supreme Court it would not only be futile but prevaricatory on the part of the Department to propound a proposition that the statements and admissions made on behalf of the Department in the show cause notices, the affidavit filed on behalf of the Department etc. had just disappeared into thin air with the observation made by the Supreme Court. The Karnataka High Court Judgment might have become non-est but what the Department has done in its proceedings and stated before the Court of Law do exist and must exist forever, unless evidences is led by the Department that what had been stated earlier before the Court was all wrong. 17. The Board considers that surely the Department cannot afford to take this t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt directive is whether the appellants were liable to pay penalty. 26. On minutely going through the records, the Board does not find any evidence whatsoever that the appellants intended to evade duty. In fact, the Collector s observations are themselves dubious on this point in that he has stated that: In the absence of any evidence, it can only be presumed that the said cigarettes-whether defective, oily or otherwise have not been disposed of in accordance with law. The only fact that has been proved as admitted by the factory is that during the relevant period a quantity of 68,59,695 cigarettes have been disposed of and in the said disposal the factory have not followed the procedure set out Rules as mentioned above. There is thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
