Transport under sale-note rules requires reliable proof of breach before penalty or duty demand can be sustained.

Rule 32 of the Central Excise Rules, 1944 allowed transport of duty-paid tobacco between licensed wholesale dealers under a sale-note containing prescribed particulars. The Court noted that the sale-notes relied on by the assessee carried the relevant details, including description, weight, duty particulars, and the names and licence numbers of the parties. The department's case rested on an alleged mismatch in description and on documents said to concern the consignor, but those documents were not produced and the consignor was not examined. On that incomplete and unproved factual basis, breach of Rule 32 was not satisfactorily established, and the penalty and duty demand were held unsustainable.

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Issues: Whether the penalty and duty demand for alleged contravention of Rule 32 of the Central Excise Rules, 1944 could be sustained on the basis of the sale-notes and the materials relied upon by the department.

Analysis: Rule 32 permitted transport of duty-paid tobacco between licensed wholesale dealers under cover of a sale-note, subject to prescribed particulars. The sale-notes relied upon by the petitioner contained the relevant particulars, including the description of tobacco, weights, duty particulars, and the names and licence numbers of the seller and purchaser. The departmental order rested substantially on the alleged mismatch in description of tobacco and on documents said to relate to the consignor, but those documents were not produced before the Court and the consignor was not examined. The enquiry was therefore found to be incomplete, and the factual basis for holding a breach of Rule 32 was not satisfactorily established.

Conclusion: The penalty and duty demand were not sustainable, and the orders of the authorities were quashed in favour of the petitioner.

Ratio Decidendi: Where liability for breach of a transport condition under the Central Excise Rules is founded on disputed documentary particulars, the department must establish the breach through proper enquiry and reliable evidence before imposing penalty or demanding duty.

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