Judgment:
1. By the impugned order the Collector of Central Excise, Kanpur held that the goods, viz. primered scooter bodies which were stored by the appellants at premises No D-12 Panki Industrial Area, Kanpur were liable for confiscation for storage in an unauthorised premises. As the goods were already released provisionally to the appellants, he directed that the bond executed by them for release of goods should be enforced for a value of Rs 5.000/-. Me also imposed a penalty of Rs 5.000/- on the appellants under Rules 173Q and 210 of the Central Excise Rules, 1944.
2. Arguing for the appellants Shri Santhanam has stated that permission to store primered bodies of scooters was granted by the Central Excise Authorities upto 23.12.85. Due to shortage of space the goods could not be removed by the appellants from the said premises. As there was no permission with effect from 24.12.85, the scooter bodies were seized by the Central Excise Officers. He has argued that the Collector in the order-in-original, at internal page 11 of the order, has held that the goods were exampted from Central Excise duty by Notification. He has also argued that the primered bodies of the scooters were not capable of being sold or bought in the market and they were not sold and bought as such. These were intermediate products. These were not chasis but scooter bodies as found by the Collector himself in the adjudication order. Shri Santhanam has relied on the judgements reported in 1986 (24)-ELJ-169(SC),-1987(31)-ELT-865(SC), 1977-ELT-199(SC),1978-ELT 366(SC),1988(33)-ELT-58(Allahabad) and 1988(33)-ELT-143 (Tribunal) in support of his contention that the primered bodies were not goods. He has also argued that there was no mala fide intention on the part of the appellants. Not removing the primered bodies from the aforesaid premises could, almost, be a technical offence and in terms of the ratio of Supreme Court judgment in the case of Hindustan Steel Limited v. State of Orissa, reported in 1978-ELT-159(SC), no penalty should have been imposed on the appellants. Under Rule 210, maximum prescribed penalty is Rs 1000/-. Rule 173Q has also been invoked in imposing the penalty. Presumably the Collector has ined the provisions of Rule 173Q (1) (b) of the Central Excise Rules for non-ac-countal of primered bodies in the statutory records. As however, the goods were not excisable, they were not required to be accounted for in the statutory Central Excise records. Rule 210 was also not applicable in this case as the scooter bodies were not excisable goods.
3. Miss Renuka Mann, appearing for the respondent-Collector reiterated what has been stated in the order-in-original.
4. I have considered the records of the case and the arguments of both sides. I find that written permission was granted to the appellants to store the goods in the premises in question upto 23.12.85. The appellants did not apply for extension of the permission with effect from 24.12.85. The Collector has held that the goods were liable for confiscation for storage in an unauthorised premises. He has not mentioned the Rule under which the goods were held to be liable for confiscation. He has, however, Imposed penalty of Rs 5000/- under Rule 173Q and 210 of the Central Excise Rules, 1944. Rule 173-Q (1) provides for confiscation and penalty in certain cases. The provision of this Rule is reproduced below: - "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 of 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, then, all such goods shall be liable to confiscation and the manufacturer, producer or licensee of the warehouse, as the case may be, shall be liable to a penalty not exceeding three times the value of the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or five thousand rupees, whichever is greater." Rule 210 of the Central Excise Rules which has been invoked by the Collector for imposing the penalty of Rs. 5,000/- is also reproduced below:- "Rule 210. General Penalty.- A breach of these Rules shall, where no other penalty is porvided herein (or in the Act), be punishable with a penalty which may extend to one thousand rupees and with confiscation of the goods in respect of which the offence is committed." The impugned order does not indicate which particular provision of Central Excise Act or Central Excise Rules was contravened by the storage of primered bodies in an unauthorised premises. The Collector himself has held in the impugned order that the goods were exempted from duty under the Notification No. 118/75-C.E., dated 30.4.1975 as amended by the Notification No. 109/82-C.E., dated 28.2.1982. There was no mala fide on the part of the appellants in storing the goods in the unauthorised premises. They applied for storage of the goods in the said premises, permission was given to store upto 23.12.1985, but they did not apply for extension of the time limit for such storage. Had there been any mala fide intention to evade the payment of duty, they would not have made any application for permission at all. As the goods are held to be exempted from Central Excise duty, the same were not required to be accounted for in the statutory Central Excise records under Rules 173Q (1) (b) of the Central Excise Rules. The goods were not, therefore, liable to confiscation under the said rule and no penalty was to be imposed either under Rule 173Q or under Rule 210 of the Central Excise Rules.
5. In view of the above discussions, I set aside the impugned order, and allow the appeal.
6. In view of this decision, it is not necessary to deal with the other points argued by Shri Santhanam.