Judgment:
1. These are two appeals filed against Order-in-Original dated 28-2-1996 passed by the Commissioner of Central Excise, Indore whereby he had confiscated 2.335 M.T. of M.S. Bars removed from the factory of the appellants M/s. Ram Darshan Rolling Mills without payment of duty imposing a penalty of Rs. 5000/- on them and confiscating the truck in which the subject goods had been removed from the factory without payment of duty giving the option of redemption of the vehicle on a fine of Rs. 35,000/- and of the M.S. Bars on a fine of Rs. 6000/-.
2. The appeal by the first appellant M/s. Ram Darshan Rolling Mills is directed against the confiscation of the aforesaid quantity of M.S.Bars and the fine in lieu of confiscation fixed in respect thereof and the imposition of penalty of Rs. 5000/-. The second appeal is by Shri Dilip Nagori, the owner of the truck which was confiscated and in respect of which fine in lieu of confiscation of Rs. 35,000/- had been ordered.
3. Shri Ashutosh Upadhyay, learned counsel for both the appellants submitted that the impugned goods had been taken out of the factory of the appellants on the truck for the purpose of weighment in the weigh-bridge situated just outside their factory. As theirs is a small factory, they did not have a weigh-bridge of their own and had to depend upon the weigh-bridge situated outside. No doubt, they had a scale in their factory in which weighment could be made upto one Tonne.
As the day on which the seizure took place happened to be a holiday due to the festival of Mahashivratri, the labourers were reluctant to continue the weighment in the small scale inside the factory and had been asked by the partner of the appellant firm to load the material in the truck and take it to the weigh-bridge for the purpose of weighment.
Thereafter the invoices would have been prepared and debited to RG 23A Part II Account made for the purposes of payment of duty. As regards the earlier two consignments which had been already removed from their factory against earlier invoices, the Commissioner had held that they had committed an offence in not having debited the RG 23A or PLA Account for payment of duty. There was no intention on their part to evade payment of duty as the RG 23A Part II debits had been provided for and mentioned in the invoices even though the actual debit in the said account had not been effected. As regards the third consignment which was seized by the department from the truck the failure to prepare the invoice and raise the debits in the relevant accounts were due to bona fide reason and there was no intention to evade any payment of duty. In view of the above position, Shri Upadhyay, learned counsel contended that there was no justification for confiscation and imposition of penalty. In this connection, he relied upon the Tribunal's decision in Garden Reach Shipbuilders and Engineers Ltd. Marine Drive Engine Plant, Ranchi v. CCE Patna reported in 1985 (19) E.L.T. 447 (Tribunal) and Heat Weld v. CCE reported in 1992 (57) E.L.T.432 (Tribunal).
4. As regards the appeal filed by the owner of the truck which had been confiscated and which had been permitted to be released on payment of fine in lieu of confiscation of Rs. 35,000/- it was contended by the learned counsel that the order is vitiated in this regard because of non issue of any show cause notice to the owner. Waiver of show cause notice was by the partner of the appellants firm whose materials had been carried in the truck but the owner of the truck was not all served with any notice. He pleaded that this score itself the confiscation of the truck be set aside.
5. The arguments were rebutted by Shri Nanak Chand, learned DR. He submitted that there was clandestine removal of excisable goods from the factory without payment of duty. From the circumstances of the case, the mala fide intention on the part of the appellants is apparent. As there was an important festival on the day of the seizure the appellants should have arranged for removal of the goods after due compliance with the legal requirements on the previous day itself. They had apparently taken advantage of the holiday and removed the goods without preparing the invoice in respect of the seized quantity of the material and without debiting the RG 23A Part II account in respect of the earlier two consignments for which they had issued the invoices.
Since they were working under the Self Removal Procedure, it was their responsibility to maintain the record properly and remove goods after proper compliance with the legal requirements. The confiscation and penalty may be sustained, he pleaded. As regards the confiscation of the truck, he fairly conceded that it is a fact that notice had not been issued to the owner of the truck.
6. I have taken note of the submissions of both the sides. As far as the confiscation of the seized M.S. Bars which were found to have been removed from the factory without cover of invoices and without evidence of payment of duty, the explanation given that the material was taken out for the purpose of weighment in the outside weigh-bridge does not justify the fact of actual removal without due compliance with the legal requirements. It has been stated on behalf of the appellants that two consignments had earlier been removed from the factory after weighing the material in the scale available in the factory itself. The material in question which was seized from the truck after it had left the factory was 2.335 M.T. A larger quantity had been weighed by them in the factory itself and removed earlier. There is no reason why they should have not followed the same procedure and removed it after preparing the invoice. Also, preparing the invoice in the other two cases was only part of the requirement which was to be followed up by debit to the PLA or RG 23A Part II account, as the case may be. By such failure, an offence attracting confiscation and imposition of penalty had taken place. In such offence cases, the facts and circumstances of each case will have to be taken into account in the matter of confiscation and penalty. The case law cited by the learned counsel does not advance their case. I accordingly, uphold the order of the Commissioner insofar as the confiscation is concerned but grant them relief by reducing the fine in lieu of confiscation from Rs. 6000/- to Rs. 2000/- and also reduce the penalty from Rs. 5000/- to Rs. 1000/-.
7. As far as the confiscation of the truck is concerned, the Commissioner has observed that there was no evidence forthcoming about the involvement of the owner of the truck except as the hired transporter of the goods seized from the truck. He had accordingly held that no penalty was imposable in that regard. Though a conveyance found to be carrying non-duty paid goods would be liable to confiscation, the fact remains that no show cause notice had been issued to the owner of the truck. No doubt, there was waiver of issue of show cause notice but that was by the partner of the firm manufacturing the goods in question. His waiver of show cause notice can operate only insofar as the appellant factory was concerned and he had no authority for waiving the show cause notice on behalf of the owner of the truck. Further the quantum of fine which had been imposed is also much higher than the combined amount of fine and penalty imposed on the appellant firm manufacturing the subject goods, the prime offender. Imposition of fine having a relation to the value of the truck without reference to the value of the offending goods and the duty leviable thereon which is a yardstick for the offence involved would be excessive and unrealistic.
In any case, as the confiscation of the truck is liable to be struck down on the ground of non issue of the show cause notice, the quantum of fine becomes a secondary issue. I set aside the order insofar as the confiscation of the truck is concerned and allow the appeal of the owner of the truck.
8. The appellants would be entitled to consequential relief in terms of this order.