B.N.Sapru, J. - (1.) The petitioner runs a Khandsari Sugar Factory in village Guniyapur, district Bijnor. He made an application as provided under Rule 92E of the Central Excise Rules (hereinafter referred to as the Rules) to avail of the special procedure. The application was allowed. On 6th July, 1976 the Preventive Officers of the Central Excise Division, Moradabad inspected petitioner's factory premises and found that one extra centrifugal of size 22.8X45.6 cm. is addition to one declared centrifugal of size 22.8 x 45.5 cm which was duly entered in L4 licence and was found sealed with cealing slip No. 4761, was also installed in the said factory and was working without declaration and without deposit of compounded levy as required by Rules 92B and 92C of the Rules. Freshly manufactured Khandsari sugar was found lying by the side of the unauthorised centrifugal. Statements of some men working in the factory were recorded. The entire Khandsari sugar so recovered was weighed and it was found to be 36.43 quintals and was seized for the contravention of the Rules. Since a prima facie case appeared to have been made out against the petitioner for contravention of Rules 92B and 92C, a notice was issued to the petitioner to show cause as to why the seized Khandsari sugar should not be confiscated and why penalty should not be imposed under Rule 92E of the Act.
(2.) In the Proceedings...consequent upon the show cause notice, the petitioner admitted that one centrifugal which was found working was unauthorised ; but he submitted that "it was on a trial run and it commenced running only from 4th July, 1976. The Collector passed an order dated 16th May, 1978. He found that the petitioner had been running one centrifugal without any declaration thereof for special procedure and without pre-payment of central excise duty. The contravention of Rule 92C of the Rules was proved. He further found the seized khandsari-sugar weighing 36.43 quintals was liable to confiscation under Rule 93E. The Collector accordingly confiscated the seized Khandsari sugar, but he gave the petitioner an option of redemption on payment of redemption fine of Rs. l.000/-. The Collector further found that the petitioner had made an application for special procedure for the period from 1st November, 1975 to 3lst October, 1976, and in view of the provisions of Rule 92B(2) the petitioner was liable to pay duty from the date from which the unit commenced operations during the season to the date on which the unit closed at the end of the season. He accordingly directed the petitioner to pay the duty in respect of the sealed centrifugal for the period from 22nd March, 1976 onwards upto 7th July, 1976 and in respect of the additional centrifugal from the date of commencing of manufacturing operations during the season till 7th July, 1976 at the appropriate rate. He also imposed a penalty of Rs. 2,000/- upon the petitioner in terms of Rule 92E of the Rules. Aggrieved, the petitioner preferred an appeal.
(3.) The appellate authority found that Collector correctly demanded the duty. So far as the unauthorised centrifugal was concerned, the appellate authority found it to have been put into unauthorised use without payment of duty. It also found that the petitioners was liable to pay duty. The appellate authority held that so far as the unauthorised centrifugal was concerned, its use was rightly presumed for the entire period. With these findings the appeal was rejected. The petitioner then went up in revision.;