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TMI Blog1986 (3) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... eir routine visit of the above unit found two lorries, viz., APG 953 and AAT 3790 loaded with 176 sugar bags intended to be transported to Co-operative Central Trading Society, Hyderabad and to Hyderabad Agricultural Co-operative Association Limited, Hyderabad. This transportation was found not to have been covered by any valid transport documents which are required under the Central Excise Rules of 1944. We repeat that the relevant Central Excise Rules of 1944 made under the Central Excises and Salt Act of 1944 insist upon the observance of stautorily prescribed procedure for the removal of the manufactured sugar from and of the godowns of the company which are required to be kept by the law. The purpose of these Rules would clearly be defeated if the observance (sic) of them is easily condoned by courts or even by the department. Rule 173Q, therefore, makes the non-observance of those Rules punishable with confiscation, fine and penalty. 3. Under Rule 52-A, no excisable goods shall be delivered from a factory except under the authority of a gate pass made in the proper form, signed by the owner of the factory and countersigned by the proper officer. Rule 52 of the Rules says th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veral days. Combined with the above is the attempt to transport sugar without, at least in one case, preparation of a gate pass. These are serious violations of excise law no matter they were committed by an I.A.S. Officer or an ordinary businessman and if allowed to succeed, the interests of public revenue will suffer. Under public finance, such illegal evasion of taxes is more a detriment to the interests of other segments of society which will have to bear the burden of this evaded tax. Accordingly, the Collector, Central Excise, called upon the petitioner-company in his show cause notice dated 17-10-1978 to show cause why action should not be taken against it under the Excise Act and the relevant Rules for the alleged violation of the above rules. Along with the writ petitioner-company, the Andhra Pradesh Co-operative Marketing Federation Limited, Hyderabad, the Andhra Pradesh Co-operative Central Trading Society Ltd. Hyderabad and the owners of the lorries were also charged with under the applicable provisions of law of the Central Excise. 5. As no one other than the Nizam Sugar Company had filed this writ, we confine ourselves to the facts relevant for the disposal of its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 to 24th April, 1978, no entries were made in R.G. 1 register, and for the period from 18th April, 1978 to 24th April, 1978, no entries were pasted showing the amount of excise duty payable to the Central Government. The Collector rejected the curfew explanation of the company. He said that the curfew in far away Hyderabad would not justify clearance of sugar without payment of duty. He observed that if the clerk was able to complete preparation of gate passes (not issue of them) and issue permits and other things for the removal of sugar, he should have had time to debit duty in the PLA for the goods. The Collector also observed that the party's argument was shown to be fallacious from the fact that 7530 quintals of sugar produced during 16.4.1978 to 23.4.1978 was not even entered in the R.G. 1, and that failure went without any explanation whatsoever from the writ petitioner. We notice that the theory of curfew propounded by the petitioner-company before the Collector does not even touch this aspect of the petitioner which is rather serious. The Collector naturally rejected the argument of the petitioner that the factory had sufficient money in the PLA to pay for these goods bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storehouse and were loaded in two lorries without preparation of gate passes and debit entries in the PLA and commented that if they could prepare their own internal documents, there was no reason for their failure to comply with the statutory obligation under the Central Excise Rules. It also commented that R.G. 1 was not updated because production and clearance had not been noted therein for the period from 16-4-1978 to 24-4-1978. It had thus confirmed, in substance, all the findings of the Collector, Central Excise. Strangely, however, the Board has characterised these serious infractions of law admittedly committed by the company and for which there was no plausible explanation offered by the writ petitioner as mere irregularities that have occurred not so much out of mala fides but negligence. We regret to say that the Board of Central Excise had too easily swallowed the facile theory of bona fides of the company. Thus observing, the Board has confirmed the order of confiscation of sugar and imposition of the penalty on the writ petitioner, but reduced the amount of penalty from Rupees one lakh to Rs. 50,000 and also fines from Rs. 10,000 to Rs. 5,000 and from Rs. 24,000 to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts of this case, we must first scrutinize the findings of the lower authorities on bona fides. We regret to say that there is no factul basis for the petitioner's submission. The findings of the Collector which we have set out in an earlier part of this judgment cannot be called certificates of good conduct and better intentions of the petitioner-company. The curfew explanation of the petitioner was considered by the Collector and was not only rejected but was held to be inapplicable to the failure of post relevant entries. We do not find from the record that any higher authority not excluding the Board had ever reversed the Collector's findings. Even the order of the Board which had merged in the revisional order and had thus ceased to exist did not categorically uphold the bona fides of the petitioner. Acting more out of fraternal solidarity and less out of the compulsions to safeguard public revenue made to tacit attempt to distribute the failure to post entries between mala fides and bona fides. It never excluded mala fides. The revisional order which is now presently under review did not say anything supporting the bona fides of the petitioner-company. The Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of violation of these rules, then the enforcement of these rules will largely become impossible. There is no textual warrant for such judicial interpretation. Rule 173Q says that if any manufacturer, purchaser or licensee of a warehouse removes any excisable goods in contravention of any of the provisions of the rules, such goods shall be liable to confiscation and also imposition of penalties. It appears to us in the context of statutory purpose the Legislature has used peremptory language creating an absolute liability that does not require the presence of any mens rea against those that remove goods without posting the relevant entries in the statutory books. When we contrast the language used in rule 173Q(1)(d) with the language used in 173Q(1)(a), this position becomes clearer. In 173Q(1)(d) the language connects the violation of the statutory provision with an intendment to evade the excise duty. But in 173Q(1)(a) the rules use no such formula. The difference in language between the two parts of the same Rule 173Q must be taken to be delibrate. The rule seeking the protection of the public revenue proceeds on the basis that the removal of excise goods from the godowns could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in Crawford Statutory Construction (Paragraph 275) that where a statute denounces as crimes acts mala prohibita (as distinct from criminal acts mala in se) such laws are either in the nature of police regulation or intended to protect the public or to promote the general welfare and that their enforcement does not call for the proof of a criminal intent unless the legislature so declares in apt words. The same author says :- "Although prima facie and as a general rule there must be a mind at fault before there can be a crime, it is not an inflexible rule, and a statute may relate to such subject matter and may be so framed as to make an act criminal whether there has been any intention to break the law or otherwise to do wrong or not. There is a large body of municipal law in the present day, which is so conceived. Bye-laws are constantly made regulating the width of thoroughfares, the height of buildings, the thickness of walls, and a variety of other matters necessary for the general welfare, health or convenience, and such bye-laws are enforced by the sanction of penalties, and the breach of them constitutes an offence and is a criminal matter. In such cases, it would, ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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