HEGDE, J.: - (1.) THE Judgment of the court was delivered by-
(2.) IN this appeal by certificate though several contentions wereraised in the memo of appeal only two ofthem were pressed at the time of hearing.They are: (1) under the circumstances ofthe case the confiscation ordered by theCollector, central Excise is illegal and (2)under any circumstances he could nothave confiscated the entire quantity oftobacco used in the mixture. The appellants are tobacco merchants in Dashrath village near Baroda inGujarat State. At the relevant time theywere holding central Excise licence inform L-2 and L-5 for the purpose of storing, selling and processing duty paid andnon-duty paid tobacco. They had theirown duty paid and non-duty paidgodowns. In about December 1958 according to their hooks they possessed thefollowing lots of different varieties oftobacco. JUDGEMENT_829_AIR(SC)_1970Html1.htm On 13/12/1958 the appellants obtained permission from the Local Central Excise Authorities to mix the above lots oftobacco. The percentage of different varieties of tobacco when mixed would have been as under: JUDGEMENT_829_AIR(SC)_1970Html2.htm
(3.) ON 23/12/1958 when the CN/CN/F521/68/DVT/C process of mixing was still going on the830Superintendent of central Excise. Preventive Headquarters, Baroda and. hisparty raided the duty paid premises ofthe appellants. There he seized the entire mixture tobacco weighing Mds.2004.3 srs. i.e., 1,64,834.50 lbs. of tobacco.According to that Superintendent whenexperiments were conducted he found inthe above mixture percentage of differentvarieties as under: JUDGEMENT_829_AIR(SC)_1970Html3.htm From this he concluded that considerablequantity of non-duty paid Biri Patti tobacco had been utilised in the manufacture of the mixture. Hence notice wasissued to the appellants on 6/01/1959 to show cause why action should notbe taken against them under Rule 40 ofthe central Excise Rules 1944 inasmuchas they brought into duty paid premises60,770 Ibs. of Biri Patti tobacco withoutpayment of duty. It was also alleged inthat notice that the appellants had removed certain quantity of Rava tobacco fromL-2 premises. The appellants submittedtheir reply on 13/3/1959. At the hearingbefore the Collector as the appellantschallenged the correctness of the experiments conducted by the Superintendent. Central Excise, the Collector himself inthe presence of the appellants conducteda fresh experiment. ON the basis of thatexperiment he came to the conclusion thatthe results obtained by the experimentconducted by the Superintendent, centralExcise are by and large correct. By his order dated 13/04/1959,the Collector, central Excise held theappellants guilty of contravening Rule 40and consequently levied on them a penalty of Rs. 2,000.00 as well as the duty payable under law. He also ordered theconfiscation of the seized tobacco weighing 1,64,834.50 Ibs. But he gave an option to the appellants of redeeming thesame on payment of a fine of Rs. 1 lac.The appellants paid the amount of fineunder protest and got the goods released.;