1991 (3) TMI 279 - AT - Central Excise

Tribunal sets aside penalties for goods transportation violation; upholds penalties for other contraventions.

The Tribunal set aside the imposition of penalties under Rule 173Q for contravention of Rule 52A, read with Rule 173G, as the goods were eventually ... Confiscation and redemption fine - penalty under Rule 173Q for contravention of Rule 52A read with Rule 173G - penalty under Rule 210 for contravention of Rules 51 and 193 - benefit of doubt where suspicion is not proof - unenforceability of confiscation where goods (or vehicle) are not available due to court-ordered releasePenalty under Rule 173Q for contravention of Rule 52A read with Rule 173G - benefit of doubt where suspicion is not proof - Imposition of penalty on M/s. IMFA Ltd. and on transporters for alleged violation of Rule 52A read with Rule 173G - HELD THAT: - The Tribunal examined whether the movement and temporary unloading of charge chrome in the officers' colony established contravention of Rule 52A read with Rule 173G so as to sustain penalties under Rule 173Q. Though unloading in the officers' colony was suspicious, subsequent events showed that the very goods were thereafter released pursuant to High Court directions and proceeded to the destinations stated in the gate passes. No evidence was produced by the Department from the alleged consignees disowning the transactions. The Tribunal held that suspicion, however strong, does not substitute for proof and that the subsequent conduct of the appellants was a relevant factor tending to support their plea of bona fide despatch. On the facts and circumstances the Tribunal found that contravention of Rule 52A was not established beyond doubt and that the appellants were entitled to the benefit of doubt; accordingly the penalties imposed under Rule 173Q for violation of Rule 52A read with Rule 173G were not sustainable. [Paras 12]Penalties under Rule 173Q imposed for alleged violation of Rule 52A read with Rule 173G on M/s. IMFA Ltd. and the penalties for violation of Rule 52A on the transporters are set aside.Confiscation and redemption fine - unenforceability of confiscation where goods (or vehicle) are not available due to court-ordered release - Validity of confiscation orders and redemption fines imposed where goods (and vehicle) had been released pursuant to High Court orders - HELD THAT: - The Tribunal held that confiscation and imposition of redemption fines cannot be sustained where the goods (or vehicle) are not in the custody of the authority because they had been released pursuant to orders of the High Court and there was no condition in those orders requiring production before the Collector. In such circumstances the proper course for the Department was to seek enforcement of the bond or bank guarantee in an appropriate forum; confiscation and redemption fines imposed in respect of goods or vehicle not available for confiscation are not in accordance with law. Applying this principle, the redemption fines imposed on M/s. IMFA Ltd. in the respective adjudication orders and the redemption fine imposed in respect of the truck are set aside. [Paras 13, 16]Redemption fines and confiscation orders in respect of goods and the truck that had been released by the High Court are set aside; Department should enforce bond/guarantee in proper forum if so advised.Penalty under Rule 210 for contravention of Rules 51 and 193 - marking and packing requirements under Rule 51 and Rule 193 - Imposition of penalty under Rule 210 on M/s. Orissa Transport Service and M/s. Ajanta Transport Co. for alleged contravention of Rules 51 and 193 - HELD THAT: - Rule 51 requires specified markings on wholesale packages unless exempted by the Collector; Rule 193 obliges packing and marking as the Collector may direct and weight marking on each package where goods are procured under Rule 192. The appellants relied on a Madras Collectorate Trade Notice purportedly dispensing with certain markings, but no exemption by the Bhubaneswar Collectorate under Rule 51 was shown. The Tribunal accepted the Collector's finding that requisite markings and packing directives were not complied with, and that transporters who failed to ensure compliance were liable under Rule 210. On this basis the penalties of Rs. 1,000 imposed on the transporters under Rule 210 were held to be in accordance with law and confirmed. [Paras 15]Penalties of Rs. 1,000 each imposed on the transporters under Rule 210 for contravention of Rules 51 and 193 are confirmed.Final Conclusion: The appeals succeed in part: penalties under Rule 173Q for alleged violation of Rule 52A read with Rule 173G and redemption fines/confiscation orders in respect of goods (and the truck) released by the High Court are set aside; penalties under Rule 210 imposed on the transporters for breach of Rules 51 and 193 are confirmed. Issues Involved:1. Imposition of penalty on the appellants under Rule 173Q for contravention of Rule 52A, read with Rule 173G.2. Imposition of redemption fine on M/s. IMFA Ltd.3. Imposition of penalty on M/s. Orissa Transport Service and M/s. Ajanta Transport Co. under Rule 210 for contravention of Rules 51 and 193.Issue-wise Analysis:1. Imposition of Penalty under Rule 173Q for Contravention of Rule 52A, read with Rule 173G:The appellants contended that the confiscation of goods and imposition of penalties were not in accordance with law, arguing that the goods were temporarily stored due to non-availability of long-distance trucks. They claimed that gate passes showing destinations Hisar and Alwar were issued, and the goods were eventually transported to these destinations as per the gate passes. The Tribunal noted that the goods were indeed released and transported to the stated destinations, strengthening the appellants' plea. It was concluded that suspicion alone could not substitute for proof, and the benefit of doubt should go to the appellants. Thus, the imposition of penalties under Rule 173Q for violation of Rule 52A, read with Rule 173G, was set aside.2. Imposition of Redemption Fine on M/s. IMFA Ltd.:The Tribunal observed that since Rule 52A was not contravened, the redemption fines imposed were not in accordance with law. Additionally, the goods had already been released by the department based on the High Court's directions, and were no longer available for confiscation. Therefore, the imposition of redemption fines of Rs. 75,000/- and Rs. 1,00,000/- in the respective orders was set aside.3. Imposition of Penalty on M/s. Orissa Transport Service and M/s. Ajanta Transport Co. under Rule 210 for Contravention of Rules 51 and 193:The Tribunal upheld the penalties imposed on M/s. Orissa Transport Service and M/s. Ajanta Transport Co. under Rule 210 for contravention of Rules 51 and 193. The appellants' argument that the requirement of markings was dispensed with by the Madras Collectorate was not accepted, as the exemption applied only within that jurisdiction and no such exemption was given by the Bhubaneswar Collectorate. Therefore, the penalties of Rs. 1,000/- each imposed on the transport companies were confirmed.Additional Points:- The Tribunal set aside the confiscation of the truck bearing No. ORU 2064 and the imposition of a redemption fine of Rs. 10,000/- on M/s. Ajanta Transport Co., as the truck had been released by the High Court without any condition for its production before the Collector.- No such confiscation and redemption fine were ordered in the case of M/s. Orissa Transport Service.Conclusion:The appeals were disposed of in the above terms, with penalties and fines being set aside where not in accordance with law, and confirmed where justified.