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TMI Blog1970 (3) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... d the tobacco stock was found intact. Thereafter, officials of the Central Excise Department visited the godowns of the accused on the 17th, 18th, 24th and 25th of April and on 5th May, 1964, but the accused did not let them check the godown. On 6th May, 1964, Shri I.S. Oberoy, Inspector of Central Excise Department sent a registered A.D. Notice informing the accused that he should make himself available for stock checking on 12th May, 1964. In spite of service of this notice the accused was not available. The officials of the Central Excise Department again visited the warehouses of the accused on 18th, 19th and 23rd May, 1964 for the same purpose, but the accused was not available on any of these days. Finally, on 30th May, 1964, a notice in the writing of Sri N.C.S. Ahluwalia, Deputy Supdt. Excise was pasted on the warehouses, requiring the accused to be present on 2-6-1964 at 8 a.m. on 2-6-1964. Sri Ahluwalia with his party including Sri I.S. Oberoy, Sri S.B. Misra and other staff of the Central Excise Department, reached warehouse at about 8 a.m. along with a search warrant issued by a Sub-Divisional Magistrate, Nawabganj. They found the building of the warehouse burning, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced in the case the learned Magistrate came to the conclusion that the accused had removed tobacco from one of the warehouses before fire was set to it. According to him, setting of fire was not accidental, but it was a deliberate act which could be the act of the accused alone and of none else. He also held that in the other godown there was whole leaf tobacco but when it was checked it was found to contain only tobacco Chura, dust and fuel wood pieces. This tobacco was also found short by about 50 Md. He therefore, held that original tobacco had been removed from the godown and it had been replaced by inferior tobacco. On these findings, the learned Magisrate held that the charge under Section 9(b) of the Central Excise and Salt Act was established against the accused. So far as Chunni Lal was concerned, he came to the conclusion that the prosecution failed to prove that he had anything to do with the godown at Nawabganj. He accordingly acquitted him of the charge. The accused was sentenced to rigorous imprisonment for a period of four months along with fine of Rs. 2000/- in default of payment of which he was to suffer further imprisonment for a period of 1½ months. Against his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anded was arbitrary. In this view of the matter, the learned Sessions Judge did not consider it necessary to go into the question whether one of the godowns had been set fire to after removing its contents as held by the Magistrate. He allowed the appeal and set aside the conviction and sentence of the accused. 6.State of U.P. has come up in appeal against the order of acquittal. It has been strongly contended that the learned Sessions Judge was wrong in thinking that if the Central Excise Officials raised a demand which was found to be unjust and excessive by the Court, no offence under Section 9(b) of the Central Excise and Salt Act is made out. It was argued that, even if it be accepted that Central Excise Officials were justified in raising a demand for payment of duty either for 694 Mds. 5 Srs. or for 496 Mds. 17 Srs. and 3 Ch. of tobacco only and they wrongly raised a demand for 702 Mds. 11 Srs. of tobacco it would still not absolve the accused of an offence under Section 9 (b) of the Act if it is found that the accused surreptitiously removed the tobacco of the godown before it was set fire to, or substituted 147 Mds. 11 Srs. 3 Ch. of tobacco in place of 197 Mds. 26 Srs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warehouse wants to remove tobacco from there he has to pay the duty payable on it. This rule clearly places the obligation for payment of duty on the owner of excisable goods when he wants to remove the goods from his warehouse. Rules do not provide that the duty becomes payable only when a demand for its payment is raised by officials of the Excise Department. According to Rule 145 all the goods which are stored in a warehouse without payment of duty have yet to be removed from there before expiry of three years on payment of duty. A perusal of these rules shows that liability of payment of duty arises as soon as the goods are produced, cured, or manufactured. In cases where they are removed from the place of production, curing or manufacturing to a warehouse, payment of duty is differed upto a period of three years or till such time as they are removed from the warehouse, provision has been made in rules 143, 147 and 149 for remission of duty in certain contingencies. According to rule 147 if the goods lodged in the warehouse are lost or destroyed by unavoidable reasons the Collector has been given a discretion to remit the duty due thereon provided that if any goods are so lodge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... caping or avoiding the payment of duty in the manner and at the time and place provided by the rules framed under the Act. Rule 144 provides that no goods are to be removed from any warehouse except on payment of duty. If a person surreptitiously removes the goods from a warehouse without payment of duty he certainly evades payment of duty. Similarly if he removes the goods without payment of duty and in order to cover up the whole or partial removal of such goods, he substitutes it by other goods he would still be said to have evaded payment of duty within the meaning of section 9(b). It may be that after the evasion comes to the knowledge of the excise officials they may demand the duty so evaded under Rule 160 but the offences of evasion is complete the moment the goods are removed from the warehouse without payment of duty. It will thus be seen that whether a demand under rule 160 is raised or not a person who removes the goods from warehouse surreptitiously and contrary to rule 144 without payment of duty, he becomes liable for evasion of duty payable under the Act. Since the offence for evasion of duty is complete before a notice for demand is given under rule 160, any defect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny bags. When excise officials seized these bags they did not seal them and entrusted them to P.W. 4 Har Narin Superdar, who was a rival of the accused in trade. This act of the C.E. Authorities deprived the accused of an opportunity of showing to the court that the weight made by the C.E. Authorities at the time of recovery and the quality of tobacco entrusted to Harnarain Superdar was the same as entered in the stock cards, and as such it would not be possible to hold that the prosecution has established the fact that the quantity and quality of tobacco found in that godown was different from that entered in the stock cards. The learned Sessions Judge also pointed out that the Panchanama Ex. KA 19 prepared by the Central Excise authorities was not a reliable document. We have gone through the Panchanama and find that the entire document appears to have been prepared first and thereafter the names of the persons who were made witnesses to it were entered on its top. This creates a doubt whether these witnesses actually witnessed the recovery of the tobacco from the godown. The document purports to have been attested by Radha Raman, Om Prakash and Brij Lal. Out of these, Om Prakash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, not in a position to fix with any certainty the weight of the tobacco burnt in this godown. It was strongly argued on behalf of the department that the godown was set on fire when it became apparent to the accused that the authorities would check the godown by forcibly opening it. The accused was certain except to set fire to the godown and put up an excuse that the tobacco had been burnt. No doubt the history of the case shown that a large number of notices were given to the accused for inspecting the godown and he was avoiding its inspection, and that the godown caught fire on the crucial day when the Central Excise Authorities were going to inspect the godowns by force. It creates a suspicion that the fire had been set to the godown for covering up illegal removal of tobacco. Suspicion, however, grave cannot take the place of proof. This circumstances alone is not sufficient to bring home the charge that the accused had set fire to the godown after removing tobacco from there. No evidence has been produced as to how the fire originated. The prosecution evidence itself shows that in this case no serious attempt was made to prove that the remains of tobacco if any, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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