M/S Suraj Containers Ltd. and Vs. C.C.E., Calcutta-i - Court Judgment

Excerpt:
1. both the appeals are being disposed of by a common order as they arise out of the same impugned order passed y the authorities below. in the impugned orders, tin containers valued at rs.46,200/- and the vehicle carrying the same have been confiscated with an option to the appellants to redeem the same on payment of fine of rs.20,000/- (rupees twenty thousand only) and rs.25,000/- (rupees twenty five thousand only) respectively. in addition, penalty of rs.7,500/- (rupees seven thousand five hundred only) has also been imposed on each of the appellants.2. the facts giving rise to the present appeals are hat on 8.6.94, a matadoor van was intercepted by the police and handed over toe central excise officers. the said van was found to carry tin containers under cover of invoice and challan dated 7.6.94. inasmuch as the date in the document was of the previous day, and officers entertained doubt about the correctness of the same and made further investigations. the invoice and challan in question were raised by m/s oriental distributors (india) situated at 3c, kundu lane, calcutta. however, the driver of the vehicle stated that the goods have been loaded from a go-down situated at p-13, transport depot road, calcutta. enquiries conducted at the above address showed that the said premises belong to m/s suraj containers ltd., a small scale industrial unit in the manufacture of excisable tin containers. shri shyam sunder sengupta, the commercial executive of the said company in his statement deposed that 4000 pcs. of tin containers in question have actually been manufactured by them and removed from the said company on 8.6.94 morning. however, the records maintained by the company did not show the production and removal of tin containers in question. shri sengupta further disclosed that the said goods have been manufactured in the company at the instance of oriental distributors (i) on account of urgency in export order. as regards and discrepancy on the date of invoice and challan, he submitted that the goods were to be originally cleared on 7.6.94 but could not be cleared and as such the same were cleared on the morning of 8.6.94.3. shri tapan kumar ghosh of m/s oriental distributors (i) disclosed that they do not have necessary equipment and infrastructure to manufacture one kg. rectangular metal container. he further added that printing sheets were sent to m/s suraj containers for manufacture of said one kg. containers, who actually manufactured the containers.however, no records of the same were maintained by them.4. on the above basis, show-cause notice was issued to m/s suraj containers proposing confiscation of the goods and imposition of penalty upon them. the second appellant, the owner of the vehicle in question was also called upon to show cause against the proposed confiscation of the vehicle and imposition of personal penalty upon him. the said show-cause notice culminated, into impugned order passed by the asst.commr. and confirmed by the commissioner (appeals).5. i have heard shri nitin kumar jain, chartered accountant appearing for the appellants and shri v.k.chaturvedi, sdr for the revenue.6. the facts as emerged from the impugned orders and the submissions made by the learned representative of the appellants are that the tin containers in question were actually manufactured by m/s suraj containers at the behest of m/s oriental distributors (i), the tin sheets sent by m/s orient. this, according to shri jain may be procedural irregularity but tin view of the fact that the duty was paid on metal containers, he prays for setting aside the impugned order.however, i find that from the statement of various persons including the driver, representative of m/s suraj containers and representative of oriental distributors, it becomes clear that metal containers in question were manufactured by m/s suraj containers without any maintenance of central excise records and without entering the same in rg-1 register. i fully agree with the observations made by the asst.commr. that it is the responsibility of the manufacturer to discharge the duty burden on the goods manufactured by him. as such, though i find that duty burden on the said containers was discharged by oriental distributors, there was definitely a lapse on the part of suraj containers. accordingly, the confiscation of the goods and imposition of personal penalty upon them in upheld. however, keeping in view the various facts and circumstances of the case including the fact that duty of rs.2,000/- was involved, which stood duly paid by oriental distributors i reduce the redemption fine from rs.20,000/- (rupees twenty thousand only ) to rs.5,000/- (rupees five thousand only) and penalty from rs.7500/- (rupees seven thousand five hundred only) to rs.2500/- (rupees two thousand five hundred only).7. as regards the confiscation of the vehicle and imposition of personal penalty upon the second appellant i observe that metal containers were being transported under cover of challan and invoice issued by oriental distributors (i). driver of the vehicle is not expected to look into the legality or otherwise of the goods and the documents handed over to him for coverage of the goods during transportation. there is nothing on record to show his involvement or to reflect upon his knowledge of the wrong clearance of the goods. as such, i set aside the confiscation of the vehicle and imposition of penalty upon him.8. the appeal filed by m/s suraj containers ltd. is rejected except reduction in quantum of redemption fine and penalty. the appeal filed by the second appellant md. m.d. hadish is allowed.

Judgment:
1. Both the appeals are being disposed of by a common order as they arise out of the same impugned order passed y the authorities below. In the impugned orders, tin containers valued at Rs.46,200/- and the vehicle carrying the same have been confiscated with an option to the appellants to redeem the same on payment of fine of Rs.20,000/- (rupees twenty thousand only) and Rs.25,000/- (rupees twenty five thousand only) respectively. In addition, penalty of Rs.7,500/- (rupees seven thousand five hundred only) has also been imposed on each of the appellants.

2. The facts giving rise to the present appeals are hat on 8.6.94, a Matadoor Van was intercepted by the Police and handed over toe Central Excise Officers. The said van was found to carry tin containers under cover of invoice and challan dated 7.6.94. Inasmuch as the date in the document was of the previous day, and officers entertained doubt about the correctness of the same and made further investigations. The invoice and challan in question were raised by M/s Oriental Distributors (India) situated at 3C, Kundu Lane, Calcutta. However, the driver of the vehicle stated that the goods have been loaded from a Go-down situated at P-13, Transport Depot Road, Calcutta. Enquiries conducted at the above address showed that the said premises belong to M/s Suraj Containers Ltd., a small scale industrial unit in the manufacture of excisable tin containers. Shri Shyam Sunder Sengupta, the Commercial Executive of the said company in his statement deposed that 4000 pcs. of tin containers in question have actually been manufactured by them and removed from the said company on 8.6.94 morning. However, the records maintained by the company did not show the production and removal of tin containers in question. Shri Sengupta further disclosed that the said goods have been manufactured in the company at the instance of Oriental Distributors (I) on account of urgency in export order. As regards and discrepancy on the date of invoice and challan, he submitted that the goods were to be originally cleared on 7.6.94 but could not be cleared and as such the same were cleared on the morning of 8.6.94.

3. Shri Tapan Kumar Ghosh of M/s Oriental Distributors (I) disclosed that they do not have necessary equipment and infrastructure to manufacture one kg. rectangular metal container. He further added that printing sheets were sent to M/s Suraj Containers for manufacture of said one kg. containers, who actually manufactured the containers.

However, no records of the same were maintained by them.

4. On the above basis, Show-cause notice was issued to M/s Suraj Containers proposing confiscation of the goods and imposition of penalty upon them. The second appellant, the owner of the vehicle in question was also called upon to show cause against the proposed confiscation of the vehicle and imposition of personal penalty upon him. The said show-cause Notice culminated, into impugned order passed by the Asst.Commr. and confirmed by the Commissioner (Appeals).

5. I have heard Shri Nitin Kumar Jain, Chartered Accountant appearing for the appellants and Shri V.K.Chaturvedi, SDR for the Revenue.

6. The facts as emerged from the impugned orders and the submissions made by the learned Representative of the appellants are that the tin containers in question were actually manufactured by M/s Suraj Containers at the behest of M/s Oriental Distributors (I), the tin sheets sent by M/s Orient. This, according to Shri Jain may be procedural irregularity but tin view of the fact that the duty was paid on metal containers, he prays for setting aside the impugned order.

However, I find that from the statement of various persons including the driver, representative of M/s Suraj containers and representative of Oriental Distributors, it becomes clear that metal containers in question were manufactured by M/s Suraj Containers without any maintenance of central excise records and without entering the same in RG-1 register. I fully agree with the observations made by the Asst.

Commr. that it is the responsibility of the manufacturer to discharge the duty burden on the goods manufactured by him. As such, though I find that duty burden on the said containers was discharged by Oriental Distributors, there was definitely a lapse on the part of Suraj Containers. Accordingly, the confiscation of the goods and imposition of personal penalty upon them in upheld. However, keeping in view the various facts and circumstances of the case including the fact that duty of Rs.2,000/- was involved, which stood duly paid by Oriental Distributors I reduce the redemption fine from Rs.20,000/- (rupees twenty thousand only ) to Rs.5,000/- (rupees five thousand only) and penalty from Rs.7500/- (rupees seven thousand five hundred only) to Rs.2500/- (rupees two thousand five hundred only).

7. As regards the confiscation of the vehicle and imposition of personal penalty upon the second appellant I observe that metal containers were being transported under cover of challan and invoice issued by Oriental Distributors (I). Driver of the vehicle is not expected to look into the legality or otherwise of the goods and the documents handed over to him for coverage of the goods during transportation. There is nothing on record to show his involvement or to reflect upon his knowledge of the wrong clearance of the goods. As such, I set aside the confiscation of the vehicle and imposition of penalty upon him.

8. The appeal filed by M/s Suraj Containers Ltd. is rejected except reduction in quantum of redemption fine and penalty. The appeal filed by the second appellant Md. M.D. Hadish is allowed.