TaxTMI 
TaxTMI 
1998 (3) TMI 238
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....ndestinely by affixing on match boxes tampering the "seal lock and key" of the C.E. department without maintaining proper accounts of the C.E. stamps, without payment of C.E. duty and without maintaining the stock accounts of C.E. stamps and matches. Accordingly the appellants were asked to show cause as to why Rs. 3,37,915.00 being the full value of damaged C.E. stamps be not recovered from them and why penalty be not imposed under Rule 209 ibid. 1.2 Foregoing allegations are based on the following facts :- (a) According to office records, two lots of damaged/unserviceable C.E. stamps, numbering 1,36,12,500 valued at Rs. 4,28,793.95 in the first lot and 1,30,54,900 valued at Rs. 5,30,355.00, were stored in two separate room....
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....the Assistant Collector for ordering re-verification. (d) In pursuance of the Assistant Collector's order dated 17-2-1994, re-verification was conducted on 18-2-1994 jointly by officers of both sides under the supervision of Supdt., C.E. Range. The stamps were counted by weighing, as per the alleged practice. (e) Foregoing re-verifications have shown a total shortage of 1,40,79,780 nos. of C.E. stamps valued at Rs. 3,37,915/-. 1.3 On adjudication, the Additional Collector of C.E., Shillong confirmed the demand of Rs. 3,37,915.00 under Rule 9(2) read with Rule 66 ibid. He also imposed a penalty of Rs. 50,000/- on the appellant company. 1.4 On appeal, the lower appellate authority has confirmed the demand on fu....
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....nd control of the appellant, if these are not accounted for by it. The said rule is not applicable to the stamps which are damaged and unfit to use and which had been handed over to the department's custody for destruction. 2.4 Ld. Advocate also challenges the counting method adopted by the department for damaged, soiled stamps, lying in departments custody for over 4 to 5 years. These were termite eaten in the damp climate of Dhubri. Weighment method adopted, itself, indicates, that the stamps could not be counted. At the time of handing over, these were in a countable state inasmuch as letter dated 11-1-1989 speaks of 10,000 gross of wrinkled stamps, 18,125 gross of non-standard stamps and a certain other gross numbers of cut stam....
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....) that the damaged stamps had been handed over to the local C.E. officers, which were kept in two rooms, duly locked and sealed by C.E. officers. This evidence is sufficient to hold that the department was having the custody of the C.E. stamps. Simply because the rooms belonged to the appellant, therefore, appellant is not at all answerable for the theft. Proper course for the department, as was rightly urged before by the appellant before the lower adjudicating authorities, was to lodge a complaint with the Police for theft of stores under its control and custody and let the law take its own course. 4.3 I also agree with the ld. Advocate that Rule 66 would not be applicable in present facts and circumstances of the case. Rule 66 ib....