J.N. Srinivasa Murthy, Member (J)
1. In all these appeals the issue involved is whether in the case of man-made fabrics on which additional excise duty is leviable, they can be confiscated, and the persons concerned in that regard in the textile mills are liable for penalty, for failure to maintain the account properly of stock in the RG 1 register, regarding the production, and the packing register, and the daily production, report, and the variation with lot numbers on the packing slips in the gate pass and the packages intercepted on 12-10-1992 by the Central Excise officers. The order-in-original confirms the duty of Rs. 1,36,811.44 recoverable under Rule 9(ii) of Central Excise Rules, 1944 read with Section 11A(2) of Central Excise Act, 1944. The seized man-made fabrics was held to be not liable for confiscation under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and so also the truck in which they were found carrying the goods. Penalty was not imposed on these respondents under Rules 173Q and 209 A of Central Excise Rules under the above Act.
2. After the review of the above order-in-original by the Central Board of Excise and Customs, the department has filed these appeals challenging the findings regarding non-confiscation and penalty under the above Act, and it is urged in the grounds of appeal and supported by the learned JDR, that there was a delay in payment of the confirmed duty by one month, and mens rea existed, apart from it there are other major vital irregularities in the management of the mills by the concerned about, accounting of its production, and the preparation of duty paying documents, and the maintenance of registers, as pointed out in this case. It is also urged that on 12-10-1992 there was a meager balance of Rs. 1591 in the PLA, against duty amount of Rs. 10,45,540.87 payable on the seized consignment. The RG 1 register reflected only a balance on 12-10-1992 which was written only up to that day. Packing register was maintained only up to 6-10-1992. There was no entry of clearances effected under GP No. 16/12-10-1992. The daily production report was not prepared after 25-9-1992. It is also urged that the clearance of 17633.50 L. Mtrs under the above gate pass and finished fabrics measuring 30440 sq. mts found in stock in the morning on 12-10-1992 shows the making of bogus entry in the registers by the appellant as 1 lakh meters of fabrics cannot be produced in a day i.e., 11-10-1992. The appellant could not offer a valid explanation for non-availability of the stock on 187,713 sq. mtrs of man-made fabrics shown in the lot register as processed /balance.
3. Regarding penalty and confiscation it is urged that as per the Central Excises and Salt Act entitled as levy and collection of duty, and since Section 9 covering offences of penalties comes thereunder, and so provisions of levy and collection include penalty also. The Delhi High Court judgment in the case of Pioneer Silk Mills Pvt. Ltd. v. Union of India – 1995 (80) E.L.T. 507 has quashed only Rules 9 and 173Q of Central Excise Rules relating to Additional Duties of Excise (Goods of Special Importance) Act, 1957 whereas in this case Rule 52A is covered in the show cause notice which deals with delivery of goods and these invoices (earlier gate pass) are also provides for penalty independently, rule is violated. The same argument is made as to the applicability of Chapter II titled levy and collection. The decision in the case of Rajasthan Processors Pvt. Ltd. and Ors. v. CCE 1994 (3) RLT 157 relied on in the order-in-original is appealed by the department. So it is urged this is a fit case for imposition of penalty on the appellant.
4. The respondents were issued notice repeatedly and inspite of that none of the respondents either appeared or made any representation.
5. Perused the Additional Duties of Excise (Goods of Special Importance) Act, 1957 as amended in 1994. Section 3 deals with levy and collection of Additional Duties and sub-clause (3) of it “makes the application of provisions of Central Excise Act and Rules made thereunder including those relating to relevant exempts from duty, offences and penalties so far as making it applicable in relation to the levy and collection of Additional Duties as they are applied in relation to the levy and collection of duties of excise on the goods specified”, application of Clause (3) of the first schedule and Sub-clause (3). They are amended in 1994 by section i.e., 3(a) of Finance Act read as above. Earlier only contained that “provisions of Central Excise Act and Rules made thereunder including those relating to rules of exemption from duties shall so far as may be applied in relation to the levy and collection of duties of excise leviable under this section in respect of any goods as they applied in relation to the goods under that Act or the other rules made thereunder.”
6. From the above rules, prior to and subsequent to 1994 it is quite apparent that there was a lacuna in the Rules. Earlier Section 3 Clause (3) of the Act 1957, 1978 till 1994 regarding power to impose penalty and apply Central Excise Act regarding the offences. In view of this clear picture, the contention of the appellant cannot be accepted. The covering of Chapter II of the penalty provisions by itself is not sufficient as is made clear in the amendments. So under these circumstances there are no ground to disturb the impugned order. The judgment of the Delhi High Court in the Pioneer Silk Mills Pvt. Ltd v. Union of India -1995 (80) E.L.T. 507 holds field even to this date for the period prior to 1994.
7. In view of this, the appeals cannot be allowed and they are dismissed.