ORDER
G.P. Agarwal, Member (J)
1. This appeal is directed against the Order-in-Original No. 9/1-D/82, dated 28-5-1982 passed by Shri G. Sarangi, Additional Collector of Customs and Central Excise, Indore.
2. The facts leading to this appeal lie in a narrow compass. The appellant firm, M/s. Indore Bottling Company, manufactures aerated waters falling under Item I-D of the Central Excise Tarriff. By virtue of Notification No. 80/80, dated J 9-6-1980, as amended from time to time, the appellant firm was availing the exemption from Central Excise duty on first clearance of the specified goods upto an aggregate value of Rs. 7.5 lakhs in a financial year and in excess thereof was liable to duty. During the checking of accounts of production and clearance, it was observed by the Central Excise officers that the appellant firm had cleared aerated waters valued at Rs. 7,47,773.16 under Gate Pass No. 220 dated 1-4-1981 to Gate Pass No. 472 dated 19-5-1981. On 19-5-1981, the appellant firm cleared the goods valued at Rs. 5,038.16 and continued to clear the goods valued Rs. 32,951.64 under Gate Pass No. 474 dated 19-5-1981 to Gate Pass No. 483 dated 20-5-1981, thereby clearing the goods valued Rs. 35,959.80 in excess of the exemption limit without payment of Central Excise duty. Consequently, a show-cause notice dated 7-1-1982 was issued 1o the appellant firm asking them to show cause why a personal penalty should not be imposed on them under Rule 173Q of the Central Excise Rules, 1944, and also why the duty of Rs. 11,106.54 should not be recovered under Rule 9(2) of the Central Excise Rules, 1944, from them, alleging contravention of Rules 9(1), 173F and 173G of the Central Excise Rules, 1944, inasmuch as the appellant firm cleared the goods in excess of the exemption limit without payment of duty on 19th May, 1981 and 20th May, 1981.
3. It is significant that before the issuance of the said show-cause notice, the appellant firm vide their letter dated 3-6-1981 addressed to the Superintendent, Central Excise MOR-IV, Indore, admitted the removal of goods without payment of duty on 19-5-1981 and 20-5-1981, but further added that the said removal of goods without payment of duty was effected for the following reasons :
(i) The concerned person looking after the Central Excise work was sick from 11-5-1981 to 22-5-1981;
(ii) This mistake, that is to say, removal of goods without payment of duty was effected due to totalling mistake of clearance value of the goods after 1-5-1981; and
(iii) Being the peak season of their product, the other persons were also busy in other factory work.
4. On receipt of the show-cause notice, the appellant firm instead of filing a detailed reply to the said show-cause notice, addressed a letter dated 13-1-1982 to the Assistant Collector reiterating the stand which was already taken by them in their aforesaid letter dated 3-6-1981. The appellant firm was again asked to file a reply to the show-cause notice making it clear that if no reply is received within the given time, their letter dated 13-1-1982 addressed to the Assistant Collector would be deemed to be the reply to the show-cause notice. The appellant firm was further reminded on 5-3-1982, but no reply was received from them. Hence, the learned Additional Collector decided the case on the basis of evidence available on records and found that the appellant firm removed the goods in excess of the limit without payment of duty on 19-5-1981 and 20-5-1981. He further found that the stand taken by the appellant firm in their said letter dated 3-6-1981 addressed to the Superintendent, Central Excise, Indore, which was treated as the reply to the show-cause notice, was not tenable in view of the facts and circumstances of the case.
5. From the records, it is clear that the excisable goods in excess of the exemption limit were removed on 19-5-1981 and 20 5-1981 without payment of duty. During the course of arguments, Shri V. Sridharan, CA, also admitted, and rightly so, that the excisable goods in excess of the limit were removed without payment of duty. His only contention was that there was no mens rea on the part of the appellant firm because (1) the goods were removed without payment of duty due to the totalling mistake; (2) that due to the peak season for sale of aerated waters there were urgent requirements; and (3) that the person dealing with the Central Excise matters was absent from 11-5-1981 to 22-5-1981. For resolving this controversy, it would be useful to extract the relevant provisions of Rule 173 Q of the Central Excise Rules, 1944, which reads :
“173-Q. Confiscation and Penalty.-(1) If any manufacturer, producer or licensee of a warehouse,-
(a) removes any excisable goods in contravention of any of the provisions of these rules, or
(b) does not account for any excisable goods manufactured, produced or stored by him, or
(c) engages in the manufacture, production or storage or any excisable goods without having applied for the licence required under Section 6 of the Act, or
(d) contravenes any of the provisions of these rules with intent to evade payment of duty.
* * * * * * (Emphasis supplied)
6. It is a trite law that guilty knowledge is not a necessary ingredient for an offence under Rule 173-Q(1) (a), (b) or (c), whereas it would be necessary in a case covered by Clause (d) as held by this Tribunal in the case of Collector of Central Excise, Madras v. Ultramarine & Pigments Limited, 1986 E.T.R. 59. In the instant case, the show-cause notice was issued to the appellant firm alleging contravention of Rules 9(1), 173-F and 173-G of the Central Excise Rules, 1944, making it clear that the appellant firm had removed the excisable goods in excess of the exemption limit without payment of duty on 19-5-1981 and 20-5-1981. Thus, it was a simple case of removal of excisable goods in contravention of the provisions of the Central Excise Rules, 1944, as envisaged in Clause l(a) of Rule 173-Q ibid. Since guilty knowledge is not a necessary ingredient for an offence under Rule 173-Q l(a) the said defence is not available to the appellant firm. Even otherwise, there is nothing on record to substantiate that there was either a totalling mistake or that the person concerned was sick or absent from duty at the relevant time. On the contrary, from the case-records the adjudicating authority has found that the Inspector had warned the appellant firm of the impending excess in the limit of exemption and therefore to make necessary arrangements for payment of duty. But, instead of this warning, the goods in excess of the exemption limit were removed without payment of duty. Not only this, the adjudicating authority has found that there was no sufficient balance in the PLA account of the appellant firm on 19-5-1981 and 20-5-1981. This violates the trust which is reposed by SRP in the assessee to see that there is a sufficient balance in the PLA account and that duty is deposited before the goods are removed. We also find on record that the Inspector during the PBC checks had intimated the appellant firm that they were likely to exceed the full exemption limit and therefore they should make necessary arrangements. Despite this fact, the appellant firm did not make any necessary arrangements and effected clearance without payment of duty. The plea that due to the peak season for sale of aerated waters there were urgent requirements itself speaks a volume against the appellant firm. This plea itself indicates that the appellant firm removed the excisable goods in excess of the exemption limit with the full knowledge that they are commiting an offence. Consequently, affirming the findings of the Adjudicating authority, we hold that the plea of the appellant firm is not sustainable either in law or on the facts of the case.
7. Shri V. Sridharan, CA, on the strength of Laxmichand’s case, 1983 E.L.T. 322 (Mad.) further contended that the show-cause notice was vague as it does not indicate as to which Sub-clause of Rule 173-Q ibid, has been violated. We do not agree because the show-cause notice charges the appellant firm with contravention of the provisions of Rules 9(1), 173-F and 173-G of the Central Excise Rules, 1944, making it clear that the appellant firm had removed the goods in excess of the exemption limit without payment of duty on 19-5-1981 and 20-5-1981. Thus, the recitation of the facts as well as the actual contravention of the particular rules in the show-cause notice distinguishes it from the Laxmichand’s case; in that in the instant case, the appellant firm was clearly put on notice as to the nature of violation. Coupled with the fact that during the course of arguments, we ourselves asked V. Sridharan, CA as to whether the mere non-mention of a particular sub-clause of Rule 173-Q ibid, has caused any prejudice to his client. To which he frankly replied, and rightly so, that it has not caused any prejudice to the appellant firm in any manner. He further added that the appellant firm was quite aware with the nature of violation and that is why they themselves addressed the said letter dated 3-6-1981 to the Superintendent, Central Excise, Indore, for ignoring this excess removal.
8. Lastly, Shri V. Sridharan also contended that penalty of Rs. 15,000 is excessive. We find that the appellant firm even before the issuance of the show-cause notice admitted that they had removed the goods in excess of the exemption limit without payment of duty on 19-5-1981 and 20-5-1981 vide their letter dated 3-6-1981 addressed to the Superintendent, Central Excise, Indore, and also deposited the duty on the goods so cleared on 22-5-1981. We think that under these circumstances the imposition of penalty of Rs. 10.000/-(Rupees ten thousand only) would meet the ends of justice.
9. In the result, the appeal is partly allowed. The findings of the Adjudicating Authority are affirmed, but the penalty is reduced from Rs. 15.000/-(Rupees fifteen thousand) to Rs. 10.000/- (Rupees ten thousand only).