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TMI Blog1973 (3) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... rayi, he and the driver of the lorry were liable for penalty and the lorry was liable to be confiscated. And the Department imposed penalties on both of them and also recovered the price of the lorry from Ibrayi. They also sought to recover from the respondent Rs. 5,000 towards the value of the 48 bags of coffee seeds claiming that the coffee seeds were liable to be confiscated, and Rs. 2332.12 p. as the excise duty payable on the coffee seeds. And these amounts were sought to be recovered from the amount of Rs. 12,000 deposited by the respondent. The respondent questioned these recoveries in the writ petition and the Single Judge who heard the matter allowed the petition. The question we have to consider is whether the order of the Single Judge requires any variation. 2.There are two aspects to the question. One relating to the levy of excise duty and the other relating to the confiscation of the excisable goods. 3.The Department appears to have proceeded under Rule 33(2) and Rule 9(2) of the Central Excise Rules, 1944. The Central Government Pleader has drawn our attention to Rules 9, 19, 24, 27, 29, 31 and 33 of the Rules in particular, to Rule 29. Rule 9 provides for the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, viz. Rule 29. This rule reads :- "Continuance of curer's liability for payment of duty - When the curer sells unmanufactured products, without payment of duty as provided in Rule 24, both the purchasers of products and the person into whose possession the products pass after purchase shall become liable for the payment of the duty due thereon, but the curer shall not be absolved from the liability laid upon him by Rule 19 until the transfer of ownership has been reported to, and acknowledged by, the proper officer." 8.Rule 31 deals with the transport of unmanufactured product under certificate of curer or purchaser. And the coffee seeds in this case will come within the expression `unmanufactured products' as defined in Rule 2. The details of this rule are unnecessary. 9.Rule 33, one of the rules under which action was taken by the Department, may now be noted. Sub-rule (l) of this rule states that no unmanufactured products of any description shall be removed from the place of curing except to the premises of a person licensed to carry on business in such products or to warehouse such products on which duty has not been paid and no such products shall be so carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "a person duly licensed under these Rules to carry on business in such products or to a person so licensed to warehouse such products on which duty has not been paid" is allowed of course, no other sale is allowed. At the same time, no payment of duty, as such, is provided in Rule 24. Rule 24(1) provides that unmanufactured products shall be cleared on payment of duty; the payment of duty mentioned therein is not any payment provided by this rule; such provision for payment of duty must be found in some other rule. A reference to Rule 19 will also throw some light on this aspect; Rule 19 closes with the expression "transferred as provided in Rule 29 to another person duly licensed to carry on business in such products". This means that the transfer as provided in Rule 29 is to a person duly licensed to carry on business in such products. In the light of the language of these three rules viz. Rules, 29, 24 and 19, we are inclined to think that the contention of the Counsel of the respondent is entitled to more weight than the contention of the Central Govt. Pleader. The result is that, since there is no evidence that Ibrayi was a person duly licensed to carry on business in coffee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apting this section state inter alia, that reference to "smuggled goods" shall be deemed to be reference to "excisable goods which have been removed in contravention of any of the provisions of the Central Excise Rules, 1944". The result is that the adapted Section 120(1) will read :- "Excisable goods which have been removed in contravention of any of the provisions of the Central Excise Rules, 1944 may be confiscated notwithstanding any change in their form." The argument of the Central Government Pleader is that this provision contains a power to confiscate the excisable goods, which have been removed in contravention of any of the provisions of the Central Excise Rules; and that such power of confiscation is available, even if the goods have changed their form. In other words, the argument is that the excisable goods may be confiscated, and that, notwithstanding any change in their form. 16.This argument is being met by the Counsel of the respondent by stating that the power of confiscation contained in Section 120(l) is only a power to confiscate smuggled goods which have changed their form. The contention is that this power does not include a general power to confiscate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We feel that the power of confiscation can be exercised only during the currency of the transport, i.e. while the goods still remain in the dominion and control of the transporter. Once transport had ceased, and the goods have come to rest in the premises of the consignee and pass into his ownerships, the power of confiscation under Rule 32 (2) is unavailable." It is pointed out by the Govt. Pleader that the observation contained in the last two sentences of the passage quoted above is not warranted by Rule 32. The Counsel of the respondent also agrees with this. We have scrutinised Rule 32; and sub-rule (2) states that, if any person carries, transports or receives tobacco without a valid permit, certificate or sale-note, or, while carrying or transporting or receiving such tobacco does not, on request by an officer, forthwith produce a valid permit certificate or sale-note, as the case may be, or enters any particulars in the certificate or sale-note in respect of any such tobacco, which are, or which he has reason to believe to be false, he shall be liable to a penalty not exceeding Rs. 1,000, and the tobacco in respect of which the offence is committed shall be liable to co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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