ORDER
P.C. Jain, Member (T)
1. Brief facts of the case as stated in the order-in-original are as follows:-
2. On a surprise visit to the factory of the appellant firm at 14.30 hrs. on 6-6-1985 the Central Excise Officers found a tanker loaded with Vinyl Acetate Monomer (VAM) weighing 10080 kgs. valued at Rs.2,59,156.80 near the exit gate of the factory. It has been alleged that VAM had been removed from the place of manufacture/storage without payment of proper Central Excise duty without making any debit entry in PLA and without preparation of any gate pass prior to removal as required under Central Excise Rules, 1944. The Commercial Manager of the Unit accepted the facts in his written statement dated 6-6-1985 regarding non-preparation of the gate pass in respect of above VAM loaded in tanker found standing at the exit gate. A show cause notice dated 31-10-85 alleging the contravention of Rules 9(1), 52A and 173G of Central Excise Rules was issued to the appellant No. (1) herein, Shri Gurdial Singh, driver of the truck/tanker in which the VAM was loaded and to M/s Citizen Roadlines (P) Ltd. – appellant No. (2) herein. Last two parties were alleged with contravention of Rule 52A read with Section 115 of the Customs Act, 1962 and they were asked to show cause as to why penalty should not be imposed on them under Rule 52A(5) of the said Rules and why the truck/tank should not be confiscated under Section 115(2) of the Customs Act read with Section 12 of the Central Excises and Salt Act, 1944. Appellant No. (1) was asked to show cause as to why the VAM should not be confiscated and why they should not be penalised under Rule 173-Q of the said Rules.
3. The appellant had pleaded before the adjudicating authority as learned advocate has pleaded before the Tribunal, that the loaded truck/tanker was at the weigh-bridge inside the factory. Its contents i.e. VAM had not yet been actually weighed. Only after ascertainment of the weight of the VAM, could the material particulars, namely quantity, value and duty be ascertained and filled in the gate pass. In other words, according to the appellant, the gate pass could be made only after ascertainment of the weight of the VAM. This had been the practice so far. In order to substantiate their plea that the truck was still within the factory and not near the gate as upheld in the impugned order of the adjudicating authority, the appellant drew the attention to the panchnama prepared on the spot by the Seizing officers. In the table relating to the list of the goods seized under column ‘place from where seized’ the officers have entered in the panchnama the following expression:-
“at weigh-bridge near the gate”.
Learned advocate has submitted that this is the most authentic record regarding the place where the truck was found. Learned adjudicating authority’s finding, according to the learned advocate for the appellant, on the basis of statement dated 6-6-1985 of the Commercial Manager that the truck was found near the gate after weighment is not correct. Learned advocate points out that the statement of the Commercial Manager that the truck was found near the gate has to be read in conjunction with the panchnama.
4. It has also been pleaded by the learned advocate for the appellant that the reliance placed by the learned adjudicating authority on a decision of Gujarat High Court in the case of Maneklal Harilal Spinning & Manufacturing Co. Ltd., Ahmedabad and others (1978 ELT 3 618) is not relevant inasmuch as that case related to payment of duty on excisable goods produced and consumed in the same factory for manufacture of other goods. That has no relevance to the facts of this case where the goods were intended to be removed from the factory on payment of duty for consumption outside the factory. Learned advocate has also pointed out to Rule 173-G(2) and Rule 52A to support his point that the duty is leviable on the goods when they are removed from the factory in cases of goods other than for captive consumption within the same factory. In view of the aforesaid legal and factual position the learned advocate has submitted that no contravention of Central Excise law has been committed by the appellants and therefore, the impugned order deserves to be set aside.
5. Learned SDR appearing for the Revenue has reiterated the finding of the adjudicating authority.
6. I have carefully considered the pleas advanced on both sides. I agree with the learned advocate’s plea that in order to determine the place of seizure of the truck, panchnama is a very important document and cannot be ignored and in fact panchnama and the statement of the Commercial Manager should be read together. I observe that the learned adjudicating authority has completely ignored panchnama which clearly states that the truck was “at the weigh-bridge near the gate”. I also observe that the learned adjudicating authority has nowhere . found that the truck was outside the factory gate. His finding has been on the basis of Commercial Manager’s statement alone without consideration of the panchnama, that the truck was near the gate; this shows that the truck was well within the factory inside the exit gate. In this factual position, there is no contravention of any Central Excise Rules. Contravention of Rule 9(1) as upheld in the adjudication order does not follow because the goods in the first instance had been stored in an approved storeroom under Rule 47 in terms of 1st proviso to Rule 1. Prima-facie one may argue, duty is required to be paid in terms of Rule 49(1) as soon as the excisable goods are about to be issued out of the place or premises specified under Rule 9 or are about to be removed from a store-room approved under Rule 47. But this Rule has not to be read in isolation. It has to be read in conjunction with other rules like Rules 51A and 52A. Rule 51A stipulates that no duty-paid goods shall be allowed, inter alia, to be retained in any part or premises of a factory. Rule 52A(1) stipulates that no excisable goods shall be delivered from a factory, except under a gate pass. If the department’s contention is accepted on a strict interpretation of Rule 49(1) as mentioned earlier the appellant would have contravened Rule 51A. A harmonious reading of all the 3 rules, therefore, would suggest that duty is required to be paid in respect of the goods other than for captive consumption when they are removed from the factory and not when they are removed merely from the storeroom although the goods still remain within the factory. This position gets further fortified from Sub-rule (2) of Rule 173-G in respect of goods covered by SRP. This Rule speaks of actual removal of the goods from the factory. In view of the aforesaid discussion of the legal position and the factual finding that the truck was still within the factory, no contravention of Central Excise Rules has taken place in the instant case. Accordingly, order of confiscation of the excisable goods and truck and imposition of penalties on the two appellants are set aside. No order is made regarding imposition of penalty of Rs. 500/- on Shri Gurdial Singh, driver of the truck because he is not in appeal before this Tribunal.
7. Appeals are, therefore, allowed so far as the two appellants are concerned with consequential relief to them.