[Order]. - Both asssessee and Revenue have filed the appeals against the same order. These appeals are being disposed off by this common order.
2. Appellants are a manufacturer of Poly Propylene Dop dyed yarn out of P.P. chips and also texturing the same. On 24-6-1996, the officers visited the appellants’ factory and found that 197 cartons containing P.O.Y. yarn and 136 cartons of texturised yarn were not entered in the R.G. 1 production records. Proceedings were launched. The non-accounted goods were ordered to be confiscated and allowed to be redeemed on a fine of Rs. 1,50,000/- and a penalty of Rs. 1 lakhs was imposed under Rule 173Q(1) on the appellants and Rs. 1,000/- on the Excise Clerk. The Commissioner (Appeals) reduced the fine to Rs. 75,000/- and penalty to Rs. 25,000/- and allowed the appeal of the Excise Clerk in full after coming to the conclusion -
“.......However looking to the gravity of the case and consideration of the fact that the seizure was effected for non-accountal of goods, it is more a case of Technical breach of rules.........”
Hence this appeal.
3. (a) Considering the conclusions reached by the ld. Commissioner (Appeals) it is difficult to appreciate how an act could be causing conclusions of ‘gravity’ and be ‘Technical breach’ at the same time, to cause for a visit of penalty and confiscation liability under Rule 173Q(1). Rule 173Q(1)(a) mandates a breach with intent to evade. In the present case, the day previous to the visit was a closed day for the staff. The production of 22nd and 23rd remained to be entered into when the officers visited. The appellants plea that they were not allowed to make an entry by the officers has to be judged with the fact, on the record and accepted by the lower authority, that a duty payment clearance was debited on 24th, the day of visit. Therefore, there is no reason to come to a conclusion that the non-accountal goods would not have been debited and taken on stock. The plea of the appellant is accepted.
(b) When the Commissioner has come to a conclusion that the matter’s gravity is that of a technical breach, then he should have in compliance of CBEC letter No. 207/37/M/77-CX. 6, dated 21-9-1978 as amended and supplemented, especially when no intention to evade emerged it being a Technical Breach, nor upheld the confiscation and/or penalty imposed under Rule 173Q(1) was not called for. If at all a penalty was called for, it should have been under Rule 226.
(c) In the facts and circumstance of the case and since 23-6-1996 was a holiday and the impugned order do not disclose any Trade Notice/Public Notice stipulating at what time of the day an entry is required to be made in R.G. 1. The non effecting an entry in the statutory record on 24-6-1996, at the time of visit of the officers, would be, if at all an infringement, which should not call for a penalty. Power to levy penalty is not a crop provided to the officers to let loose in all transgressions; penalty should not be ordinarily imposed unless there is a deliberate defiance of law or contumacious or dishonest conduct or a conscious disregard to an obligation is established in the facts of a case.
(d) There is no reason to order confiscation of the goods found in the premises.
(e) The appeal in this case is therefore required to be allowed after setting aside the confiscation, consequent redemption fine and the penalties.
4. Ordered accordingly.