R.K.ABICHANDANI - (1.) The Customs, Excise and Gold (Control) Appellate Tribunal, Mumbai has referred the following question of law to this High Court under section 35G(1) of the Central Excises and Salt Act, 1944 : "Whether in absence of any specific penal provisions in section 3(3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the provisions relating to confiscation and imposition of penalty are applicable to man made fabrics which are `excisable goods' finding mention in Schedule to the Central Excise Tariff Act, 1985 though they are liable to additional duty of excise only?"
(2.) There was a raid conducted in the premises of the appellant by the officers of the department on 12th/13th February 1993 and a panchnama was drawn in respect of the proceedings undertaken during the raid. Thereafter, a showcause notice was issued on 11/05/1993 in respect of the violations of the provisions of the Act and the Rules and the appellant was called upon to pay duty of Rs.52,717=00 and also to show cause as to why penalty should not be levied under various Central Excise Rules mentioned therein. 2.1 The violation of the Rules entailing imposition of penalty was alleged on the ground that the assessee had evaded central excise additional duty by removing the fabrics without payment of such duty. In the showcause notice dated 11-5-1993, issued to the assessee by the Collector, Central Excise and Customs, it was alleged that the assessee had removed man-made fabrics admeasuring 50,446 L. Mtrs. after processing without payment of central excise duty and without issue of GP1s. It was alleged that the authorised signatory of M/s Ashok Fashions Ltd., in his statement, had not disputed this fact. The additional duty to the tune of Rs.52,717=00 was thus evaded. The acts of contraventions of various provisions referred to in the showcause notice constituting willful and deliberate suppression of facts and misdeclaration of quantities in statutory central excise documents with an intention to evade payment of excise duty, were alleged to have been committed. It was alleged that these acts were covered by Rules 9(2) and clauses (a) (b) and (d) of sub-rule (1) of Rule 173Q of the Central excise Rules. A demand of additional duty of excise to the tune of Rs.52,717=00 was, therefore, made.
(3.) The demand came to be confirmed by the Collector, which order was challenged before the Tribunal. The Tribunal found that the physical verification had been done by the panchas and that there was a statement recorded of the appellant's authorised signatory Dineshbhai Dahyabhai Shah accepting the mistake which had resulted in the breach of the provisions of the Central Excise Rules. The Tribunal found that the levy of duty was rightly made. As regards the penalty of Rs.10,000=00 imposed on the appellant under Rule 173Q (1) of the Central Excise Rules, 1944 by the Collector, Central Excise and Customs, under his order dated 8/08/1994, the Tribunal, placing reliance on the decision of the Delhi High Court in Pioneer Silk Mills v. Union of India, reported in 1996 (67) ECR 131, held that no such penalty could be levied. The appeal was, therefore, partly allowed in respect of the penalty imposed on the appellant, while confirming the demand of duty under the said order made by the Collector. 3.1 The Collector, Central Excise and Customs had, under the said order, also imposed penalty on Dineshbhai Dahyabhai Shah, the authorised signatory of M/s Ashok Fashions Ltd. and the appeal which was filed by that authorised signatory was allowed by the Tribunal again relying on the decision of the Delhi High Court in Pioneer Silk Mills (supra).;