ORDER
V.P. Gulati, Member (T)
1. The above appeals have been filed for setting aside the order of demand of duty and confiscation of truck and the goods and also levy of penalty, on the respective appellants. The matter was posted for hearing on. 30-1-1996 and at the request of the Counsel for the appellants, the matter was adjourned to 9-2-1996. Again adjournment was sought for on the ground that the Counsel is away. None is present for the hearing today. Inasmuch as the matter has been adjourned once at the request of the Counsel for the appellants, no further adjournment is granted and the appeals are taken up for disposal on merits based on the records available.
2. Brief facts of the case are that the officers of the Central Excise intercepted a truck late in the evening on 27-6-1993. On checking the gate pass the officers found that the time of removal of the goods mentioned therein was 9.25 AM and since there was inordinate delay in transporting the goods the truck was intercepted and the driver was questioned. He informed that he earlier carried another consignment of 135 ingots from Aditya to M/s. Pioneer Re-rolling Mills and the supervisor of Aditya Steel Industries advised him to avoid making entries at the Check post as the same set of papers were to be used for despatch of another consignment and when he reached M/s. Pioneer Steel Re-rolling Mills, 35 ingots were found defective and were returned and he carried the same back to M/s. Aditya Steel Industries from where another load of 135 ingots was carried in his truck which was intercepted by the officers. As a follow-up action the officers searched the premises of both M/s. Aditya Steel Industries and the Pioneer Steel Re-rolling Mills and recorded statements from Raghuvir Singh Supervisor of Aditya Steel Industries, Lakhi Prasad, Manager of Aditya,. M. Gupta, Managing Partner of Aditya, M.G. Murtaza, Managing Partner of M/s. Pioneer Steel Re-rolling Mills. It is in these circumstances proceedings were initiated against the appellants which resulted in the impugned order under which duty of Rs. 20,260/- has been demanded from appellants Aditya Steel Industries, confiscation of 10.090 MTs of M.S. Ingots with option to redeem the same on payment of fine of Rs. 20,000/- to be adjusted from the security deposit. The learned lower authority has also confiscated the truck and allowed the same to be redeemed on payment of fine of Rs. 8,000/- to be adjusted from the security deposit, besides penalty of Rs. 2,500/~ on Aditya Steel Industries under various provisions of Central Excise Rules, 1944, Rs. 2000/- on M/s. Pioneer Steel Re-rolling Mills and Rs. 1000/- each on driver Mohd. Ikram, Lakhi Prasad. and R. Singh. Mohd. Ikram in his statement before the authorities given on 27-6-1993 has stated as under:
4. Shri Mohd Ikram, Truck Driver, in his statement dated 27-6-1993 deposed that in the morning at 8.00 Hrs. he started with the vehicle bearing Registration No. AP 10T 1976 from Musheerabad and reached the factory premises of Aditya by 9.00 Hrs; that at Aditya 135 pieces of M.S. Ingots were loaded in the vehicle at 9.30 Hrs; that the factory Supervisor handed over the documents and informed him not to make entry at Commercial Tax Check Post as the same papers were to be used to despatch another consignment; that he avoided the Check Post and took different route and reached the factory premises of Pioneer; that the Ingots were unloaded and it was found that 35 Ingots were defective; that he was asked to give them back to Aditya; that he started from Pioneer at 14.00 Hrs. alongwith 35 pieces of defective Ingots and reached Aditya and unloaded the same at about 15.45 Hrs. that another consignment of 135 pieces of M.S. Ingots was loaded at 16.15 Hrs. and the factory Supervisor asked him to deliver the goods at Pioneer; that the Supervisor also gave him another weighment slip for 135 pieces showing the net weight as 10.070 M.Ts; that except the weighment slip, the Supervisor had not given any document like Central Excise Gate Pass etc. for the said consignment; that the said consignment passed through the Commercial Tax Check Post and. he also handed over the Inward Pass showing the passing time as 5 P.M. on 27-6-1993 against first check registration Sl. No. 2368; that he crossed the Secunderabad Cantonment 3 times once while coming from Medchal, returning to Medchal and. again while taking the second consignment alongwith the M.S. Ingots and that he did not get transit passes when he was taking empty lorry to Medchal in the morning. Regarding the indication on the left side of the weighment slip given second time, he stated that for the second load of 135 pieces of M.S. Ingots, he did not have any other document except weighment slip.
3. Raghuvir Singh, Supervisor of Aditya in his statement dated 28-6-1993 stated that on 27-6-1993 one consignment of M.S. Ingots weighing 10.300 MTs was cleared at 9.25 AM under Gate pass No. 184, dated 27-6-1993. Shri Lakhi Prasad Manager of Aditya in his statement dated 28-6-1993 stated that he despatched 135 ingots at 9.25 AM on payment of central excise duty vide gate pass No. 184 on 27-6-1993 to Pioneer and the same was unloaded at Pioneer and that the driver had brought back gate pass No. 184 alongwith the vehicle and the way bill No. 179 which was issued for 135 ingots and that he again despatched one more consignment of 135 ingots under the cover of the same gate pass and way bill around 4.45 PM on 27-6-1993 and they have not paid any duty on the second trip. Shri Matadeen Gupta, Managing Director of Aditya in his statement stated that on perusal of three weighment slips and two factory gate passes, three consignments appear to have been cleared from Aditya. Murtaza, Managing Partner of Pioneer in his statement stated that consignment of 10.170 of ingots was received in their factory on 27-6-1993 from Aditya and returned the same at 2 PM due to variation in weight and that gate pass for 10.300 MT was sent alongwith the material for verification of weighment and that they have not received back the same.
4. M/s. Aditya Steel Industries in their appeal memorandum have urged that there was no shortage or excess found in their premises nor in the premises of appellants Pioneer Steel Re-rolling Mills. It was pleaded that the appellants could not have manufactured and removed at short notice such quantity of ingots and therefore, the learned lower authority has erred in holding against the appellants. It has also been submitted that the learned lower authority has relied upon the contradictory and inconsistent deposition and the statement has been obtained by the [investigating] authority from the driver, under duress.
5. M/s. Pioneer Re-rolling Mills have likewise urged that there was no excess of the goods lying in their factory and have also stated that M/s. Aditya Steel Industries could not have had a stock of 170 ingots in question taking into consideration the nature of the goods involved. Regarding the weighment slips recovered by the authorities they merely submitted that the lower authority did not accept the contention. Regarding admission by the driver to get the documents entered in the check post, it has been pleaded that the factory Manager of Aditya has not confirmed this averment. It has been urged that the appellant has taken a plea before the lower authority that the consignment of 135 ingots received earlier in the day was returned as such and in view of this, no duty could be demanded in respect of the same. They further submitted that while Driver Ikram has stated that 35 ingots were returned as defective the supervisor Murtaza deposed that the entire consignment was returned. In view of this contradiction the statement of the driver could not be accepted. It has also been urged before the learned lower authority that the goods were returned on the same day after the defects pointed out were rectified since the removal was only of runners etc. Regarding the transit pass which was seized, it has been pleaded that these 3 transport passes were issued by 3 different transit points for one and same transaction. Further it was submitted that there was no corroboration of the statement of Ikram, the driver about the advice given by the supervisor i.e. to avoid the check post. It was submitted that the statements of Lakhi Prasad, Manager of Aditya Steel Industries and Murtaza, Managing Partner of M/s. Pioneer are not inconsistent with the plea of innocence and the learned lower authority has not appreciated the evidence properly.
6. Ikram, the driver has urged in his appeal memorandum that the ingots which were sent in the morning were returned as such and he had taken the same back to M/s. Pioneer from Aditya. It is urged that it is not correct to say that he transported only 35 ingots as noted by the officers. He pleaded that he has not done anything to warrant levy of penalty on him.
7. Lakhi Prasad in his appeal memorandum has urged that there was no shortage as such found in the factory and the learned Collector has not appreciated the evidence correctly while only one consignment was cleared from the factory. He has further pleaded that there is no corroboration of the driver’s statement and the statement of the Manager of M/s. Pioneer and the statements are not inconsistent with their innocence.
8. Shri Arulsamy, learned DR for the department referred to the Order-in-original and the statement of various persons as set out in the order of the lower authority and pleaded that Ikram, driver made a clean breast of what he had done with reference to the transport of the goods and has given a statement as to how he had brought earlier consignment to avoid check post and took 35 ingots which were found defective and brought another 135 ingots subsequently which were intercepted by the officers. He has given the details of timings and the name of the supervisor who gave instructions to him. He pleaded that in view of this, and the recovery of the 2 gate passes from M/s. Pioneer, it would clearly show that M/s. Pioneer received three consignments. He further pleaded that one weighment slip was recovered from M/s. Pioneer and two other weighment slips were recovered from the driver and the factory gate passes were recovered from M/s. Pioneer. This would clearly show that there were three transports of ingots on 27-6-1993 out of which two consignments were already received by M/s. Pioneer and one was intercepted in transit. He, therefore pleaded that there was clandestine removal of three consignments of ingots from M/s. Aditya while duty had been paid only in respect of one consignment and covered by only one gate pass and the same gate pass was used to transport the second consignment which was intercepted. On a query from the Bench he could not answer as to how 3 consignments could be related to M/s. Aditya and whether there was any entry or mark to show in this regard that the three slips related to the consignments cleared from M/s. Aditya. On going through the various entries made, he pleaded it is clear that there was double transport relating to one slip and the factory gate pass. He pointed out that as mentioned in para 8 of the order (page 6) Aditya had cleared 3 consignments and two consignments were received by M/s. Pioneer as evidenced by their factory gate pass and the other consignment was received by M/s. Pioneer without gate pass without payment of duty. It was pointed out to the learned DR whether this information was elicited from anybody as to whether M/s. Aditya supplied all the three consignments, he fairly conceded that no information was elicited by the authorities. He however, pleaded that the statements of the various persons would show that three consignments of the various persons would show that three consignments were actually despatched from M/s. Aditya. He however, pointed out that Murtaza, Managing Partner of M/s. Aditya after seeing the documents has stated that three consignments appears to have been cleared from M/s. Aditya. He however conceded that no definite information was obtained from anybody. He pleaded that the appellants had been disregarding the law and indulging in clandestine removal of the goods from Aditya to other unit and inasmuch as consignments had been removed without payment of duty from Aditya, and there had been receipt of the goods by M/s. Pioneer, with the knowledge of the persons who were incharge of the goods, the goods have been rightly held to be confiscable, besides the truck and the appellants are also liable to penalty as held by the lower authority.
9. I have considered the pleas made in the appeal memorandums and also the pleas made by the learned DR for the department. I observe that Driver Ikram has given detailed statement setting out facts which could be only within his knowledge, as to the modus operandi adopted for removal of the goods by clandestine use of the gate pass for double transport and his statement is corroborated by the statement of Lakhi Prasad, factory manager of Aditya who has accepted that under the cover of the same gate pass under which goods were cleared earlier, another 135 ingots were sent. Raghuvir Singh of Aditya has stated in his statement that he had sent a consignment of 135 ingots at 9.25 AM on 27-6-1993 under gate pass No. 184, dated 27-6-1993. The slips and the factory gate pass seized support the case of the department that there had been double transport of the goods from Aditya and receipt of the same at Pioneer. The evidence establishes that the one consignment which was removed in the morning and the one which was intercepted were removed from M/s. Aditya. There is statement by Murtaza, Managing Partner of Pioneer that they returned ingots. It is observed that there is a finding by the Collector that the goods stated to be defective could not have been returned after removing the defects on the same day. The appellants have stated that the defects pointed out were only minor. It is observed that the lower authority has analysed the position in regard to the return of the goods and his findings in this regard that the consignment in question could not have been returned (sic) are well reasoned and acceptable.
What emerges is on the admission of the factory Manager of M/s. Aditya and Shri Raghuvir Singh of the said company is that 135 ingots were removed in the morning under the cover of a gate pass and the same gate pass was used for transport of another 135 ingots. I, therefore, hold that there is clear evidence of removal of 135 ingots twice one weighing 10.300 MT and subsequently one which was intercepted weighing 10.170 MTs. I, therefore, hold that the appellants M/s. Aditya are liable to pay duty and penalty for removal of the second consignment without payment of duty and also for use of the gate pass twice over. So far as the alleged transport of 3rd consignment is concerned, the evidence relied upon by the department is by way of gate slips. There is nothing to indicate that this slip was emanated from M/s. Aditya and the driver has also admitted to have taken consignments from Aditya twice only. In the face of this, the benefit of doubt has to be given to the appellants and duty in respect of the same cannot be demanded from Aditya.
10. So far as imposition of penalty is concerned, I find that the statements of Raghuvir Singh of Pioneer Steel Re-rolling Mills and Driver Mohd. Ikram have to be taken to be voluntary and there have been no retraction of their statements. They have not probabilised that there was any coercion or threat. In view of this, I hold that they are liable to penalty and penalty of Rs. 1,000/- cannot be considered as excessive in the facts and circumstances of the case. So far as redemption fine of [Rs.] 8,000 on the truck is concerned, the truck was admittedly used for clandestine removal of the goods and therefore, truck is liable to confiscation. However, the redemption fine on the truck is reduced to Rs. 5,000/- (Rupees Five thousand). In the facts and circumstances of the case, the redemption fine on the goods which are confiscable as held by the lower authority and which I agree with for the reasons set out in his order cannot be considered excessive and the same is confirmed in entirely. So far as imposition of penalty on Lakhi Prasad is concerned, he was the Manager of Aditya and he was responsible for the affairs in the factory and he is therefore liable to penalty under Rule 209A and I uphold the penalty of Rs. 1000/-imposed on him. Penalty under Rule 209A cannot be imposed on partnership concern and only the person concerned could have been penalised. Therefore, penalty levied on Pioneer Re-rolling Mills is not maintainable and is set aside and their appeal allowed. M/s. Aditya are liable to penalty under Rules 9(2), 52A and 173Q and 226 of the Central Excise Rules, and I hold that penalty of Rs. 2500/- imposed on them cannot be considered as excessive and I uphold there same.
11. In the result, the appeals of Lakhi Prasad, Raghuvir Singh and Mohd. Ikram are dismissed and the appeal filed by M/s. Pioneer is allowed and the appeal filed by M/s. Aditya is disposed of in the terms indicated above.
12. The cross-objections filed are in the nature of comments and the same are dismissed.