Emergency removal of chassis under bond was treated as bona fide, defeating penalty under excise rules.

Removal of chassis received under bond to a sister concern was treated as justified where an immediate contingency was shown and the goods were shifted to prevent possible damage. The chassis were duly accounted for, the assessee attempted to contact the Assistant Collector the same evening, and the department was informed the next morning. On those facts, there was no basis to disbelieve the explanation or infer absence of bona fides. Board instructions permitting emergency removal also supported the assessee, so no penal action was warranted and the penalty was set aside.

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Issues: Whether penalty was sustainable for removal of chassis received under bond to a sister concern in alleged breach of Rule 191B(6) of the Central Excise Rules, 1944, where the removal was claimed to have been made in an emergency to prevent damage and the authorities were subsequently informed.

Analysis: The chassis had been duly accounted for. The explanation that there was an immediate contingency and that the goods were shifted to a nearby sister concern to prevent possible damage was accepted. The record showed attempts to contact the Assistant Collector on the same evening and prompt intimation to the departmental officers the next morning. In the circumstances, the Tribunal found no material to disbelieve the appellants' version or to hold that they acted without bona fides. The Board's instructions permitting removal in emergencies also supported the appellants' conduct.

Conclusion: The removal was held to be justified in the circumstances, no penal action was called for, and the penalty was set aside in favour of the assessee.

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