ORDER
G. Sankaran, Vice President
1. The captioned appeal was originally filed as a revision application before the Central Government against order-in-appeal No. 312-B of 1981 dated 30-6-1981 passed by the Central Board of Excise and Customs. On the setting up of this Tribunal, the revision application was transferred to it in terms of Section 35P(2) of the Central Excises and Salt Act, 1944, to be disposed of as if it were an appeal filed before the Tribunal.
2. The facts of the case material and relevant for our purpose may be briefly stated. M/s. Bata India Limited (hereinafter, for brevity’s sake, “Bata”) had manufactured during the period 1975-78, 70 shoe-making machines classifiable and chargeable to excise duty, under item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (the “CET” and the “Act” respectively). Some of these machines were cleared from the factory for sale to other parties and some were used within the appellant’s factory for shoe-making. Theywere cleared, or used, in the manner aforesaid, without payment of the excise duty leviable thereon and without observance of the excise formalities under the Central Excises Rules, 1944 (hereinafter the “rules”). It appears that the matter came to notice during audit of the Bata Factory and the department wrote to Bata on 4-1-1979 on the subject enquiring about the details of the machines manufactured since 1975. It appears that soon thereafter Bata realised their default and offered to pay the leviable duty immediately. The duty was paid as per Bata’s calculations on 19-3-1979. The Superintendent of Central Excise issued a notice dated 22-2-1979 calling on Bata to show cause why the amount of Rs. 46,243.34 should not be recovered from them towards the duty leviable on aforesaid machines, in terms of rule 9(2). Bata replied regretting their error and contending that the lapse was entirely unintentional. On 5-9-1979, the Superintendent issued a corrigendum to the effect that cause was to be shown to the Collector and not the Assistant Collector as earlier directed. It appears that prior to this corrigendum, the Assistant Collector had heard Bata and reserved his order. On 27-6-1980, the Collector issued a fresh notice in supersession of the notice dated 22-2-1979. By this notice, it was alleged that Bata had contravened rule 173PP. Bata was called upon to show cause to the Collector why penalty should not be imposed under rule 173Q and duty amounting to Rs. 46,243.34 should not be demanded from the under rule 9(2). Bata replied on 8-7-1980 on the same lines as they had done with reference to the Superintendent’s notice, on 12-8-1980, the Collector issued a corrigendum to the show cause notice clarifying the amount of duty was amended to Rs. 1,65,834.22 at 8% ad valorem. Bata replied on 3-10-1980 contending that duty could be levied only at the rate prevalent on the date of manufacture and/or clearance and not at a rate in force on the date of payment of duty. They pleaded that the duty already paid by them should be deemed to be the correct amount of duty payable. In due course, the Collector passed an order on 3-10-1980, holding the charges against Bata as established. He imposed a penalty of Rs. 1,25,000/- on Bata and ordered that they should pay duty of Rs. 1,65,834.72 minus the duty already paid by them. On appeal, the Board passed an order dated 30-6-1981 (now under challenge before us) reducing the penalty to Rs. 25,000/-. The Board observed that the goods had been cleared without payment of duty and without compliance with the formalities under the rules and, therefore, it could not be said that the goods had been ‘cleared’ or ‘removed’ in a manner so as to attract the provisions of Rule 9A (i)(ii). The applicable rule, in the circumstances, was Rule 9A(5), held the Board and consequently it confirmed the Collector’s order demanding duty at the higher amount.
3. We have heard Shri S.K. Bagaria, Advocate for the appellant and Shri K.C. Sachar, Departmental Representative for the respondent.
4. The gravamen of the learned counsel Shri Bagaria’s contentions is that, on the facts and in circumstances of the present case, Rule 9A (i)(ii) and not 9A(5) applied. Therefore, the duty rate in force on the date(s) of removal/clearance was applicable and not the rate in force on the date of payment of duty. In this connection, he drew out attention to the amendment of rule 9A brought about by notification No. 101/81 dated 11-4-1981 whereby the term “cleared” in the rule was substituted by the term “removed”. The present case fell in the period prior to the amendment. The two terms were not defined in the Act or the Rules and were used synonymously and interchangeably. There was no warrant to support the Board’s view that “cleared” would mean only clearance on payment of duty and after compliance with the formalities under the Rules. If the Board’s view was correct, the term “removal” could not be used for removal on payment of duty (it would be “clearance”, as per the Board’s view). However, several sections of the Act and the Rules [e.g. Section 11A(3)(ii), 11B explanation B, Rules 9(1), 9A(1) 2nd proviso, 14A (proviso a), 14B(i), 49(1), 53(1)(a)] used the term “removal” for clearance on payment of duty. There was, therefore, no distinction between “cleared” and “removed”. If this be so, Rule 9A(1) (ii) clearly applied to the present case. The amendment to Rule 9A by the notification No. 101/81 was only by way of clarification. Otherwise, it would conflict with the scheme of the Act and the Rules.
5. The learned Departmental Representative however, ‘contended that the applicable rule was 9A(5). The provisions of Rule 9A(1) were, even prior to the amendment of 1981 (notification 101/81), subject to the provisions contained in Sub-rules (2), (3) & (3A). The context determined the meaning of the terms employed in the rule and so there would be no warrant to look into the other rules and sections for finding out the meaning of the term “cleared” in rule 9A(i) for the present purpose.
6. In a brief rejoinder, Shri Bagaria contended that in so far as the present case was concerned, Sub-rules (2) (3) and (3A) were not relevant and could not, therefore, control the applicability of rule 9A(1)(ii).
7. Both sides have cited authorities in support of their respective stands and we shall presently discuss them. But before we do so, it will be useful to set out rule 9A(i) and (ii) as they stood during the relevant period.
“Date for determination of duty and tariff valuation.-
(1) The rate of duty and tariff valuation if any, applicable to any excisable goods shall be the rate and valuation in force,
(i) in the case of goods cleared from the premises of a curer on payment of duty, on the date on which the duty is assessed; and
(ii) in the case of goods cleared from a factory or a warehouse, subject to Sub-rules (2), (3) and (3A), on the date of the actual removal of such goods from such factory or warehouse.”
The term “cleared” was substituted by the term “removed” by notification No. 101/81.
8. In re: Bharat Metal Industries Batala, 1981-ELT-503 the Board (as appellate authority) had held that when the dates of clearances of the goods was ascertained from the books of accounts maintained by the appellants, duty was chargeable in terms of Rule 9A(1)(ii) and not Rule 9A(5).
9. In re: Mining & Allied Machinery Corporation Durgapur, 1982-ELT-517, the Central Government, acting as revision authority, held that it was not the intention (of the rule) to invoke Rule 9A(5) when the date of removal of the goods from the factory was known to the department. The absence of the word “on payment of duty” in clause (ii) was significant. Clause (ii) dealt with clearances from the factory or warehouse, whether on payment of duty or otherwise. After discussion of various rules and sections, the Central Government specifically discounted the Board’s view that clearance implied removal of goods from the factory of production in a regular and legal manner. The words “removed” and “cleared” were used synonymously and the words “cleared” and “clearances” only meant the removal of the goods whether on payment of duty or without payment of duty from factory or warehouse.
10. We now turn to the decisions of the Tribunal having a bearing on the issue in dispute. In Daya Ram Metal Works Pvt. Ltd. v. Collector of Central Excise, Baroda, 1985 (20) ELT 391, the Tribunal observed that there was no concept in rule 9A(5) to the effect that when the clearances were not in accordance with law, then the current rate as prevalent on the date of payment of duty would be applicable.
11. To the same effect is the view of the Tribunal in Veekayan Industries v. Collector of Central Excise, Chandigarh, 1985 (21) ELT-596. The words “cleared” or “clearances” were synonymous with removal and referred to removal of goods whether on payment of duty or without payment of duty. The contention that “cleared” would mean cleared on payment of duty was not accepted.
12. As against the above decisions which go to support the appellants’ contention, a couple of decisions of the Tribunal to the contrary were also cited before us. The first is R. Subbiah Gounder v. Collector of Central Excise, Coimbatore, 1985 (21) ELT-618. In this case, the allegation was that the tobacco warehouse licencee had illicitly removed non-duty paid tobacco from his bonded warehouse in contravention of Rule 151(c) and (d). Duty on the resultant shortage was demanded under rule 160. We find that the Bench noted that according to the view taken by the highest authorities in the department on the advice of the Ministry of Law, Rule 9A(5) was applicable to cases of this type. The Bench further noted that neither side was able to say as to why rule 9A(5) should not apply to cases of such illicit removals. No authorities were cited before the Bench as has been done before us. It was in these circumstances that the Bench approved the view taken by the Board that rule 9A(5) applied to such cases before rule 9A was amended in 1981. In this background, we do not think this decision offers a precedent which, we must follow when considerable discussion has taken place before us on which rule applied and several relevant authorities cited before us.
13. The second decision is in Bliss Pack, Bombay v. Collector of Central Excise, Bombay 1985 (21) ELT-843. The Bench noted that the appellants in the case had not maintained any account showing the dates of clearances of the goods. Since there was no “clearance” in accordance with the rule (i.e. removal after completion of all excise formalities and payment of duty due), as required by the unamended rule 9A(i) & (ii) during the relevant period, this rule was not applicable; the applicable rule was 9A(5). But it should be noted, as pointed out by Shri Bagaria, that Bata in the present case had maintained private records which in fact formed the basis of the computation of the quantities and value of clearances and from which the dates of clearances could also be established. Also, the Tribunal’s decision in 1985 (21) ELT-596 does not seem to have been cited before the Bench. For these reasons, we do not think the ratio of this decision would be applicable to the present case.
14. We are in agreement with the authorities cited and discussed earlier that when the dates of actual removal of the goods are ascertainable, as is the case in the present matter, rule 9A(1)(ii) and not rule 9A(5) would apply during the period in dispute. We, therefore, set aside this part of the Board’s order and restore the demand for duty to that applicable in terms of Rule 9A(1)(ii).
15. As regards penalty, it is apparent from the record that the goods had been cleared without payment of duty. It was only during audit check that it was detected that Bata was manufacturing the machines and using them within the factory without payment of duty. It appeared that a spot memo was issued on 28-12-1976 to which Bata sent a reply on 18-4-77. The Range Superintendent called for full particulars of such machines on 22-7-1978 and it was only after a series of reminders that the full data was forwarded by Bata who also paid the duty. These findings of the Collector remains unrebutted. We cannot possibly view infractions of law by a Company of the standing of Bata with the same lenient attitude which a small manufacturer not full conversant with excise law and procedure may possibly deserve. We further notice the Board has substantially reduced the penalty amount. In the circumstances, we do not see any justification to modify the Board’s order in this regard.
16. In the result, we modify the Board’s order to the extent of ordering that duty is chargeable only in terms of rule 9A(1)(ii). Any duty paid in excess should be refunded to the appellants. The Board’s order is confirmed in other respects. The appeal is disposed of in the above terms.