1. Amounts of Rs. 1 lakh and Rs. 5,000/- were deposited by the appellants under T.R. 6 Challans dated 14-2-1983 in the State Bank of India, Sikandrabad. In the challan of Rs. 1 lakh under the head of the account it was mentioned 'special duty' whereas on the challan of Rs. 5,000/- the words 'basic duty' were written. As per the case of the appellants Rs. 1 lakh were to be deposited in P.L.A. Account for basic duty (BED) and on the challan of Rs. 5,000/-special duty i.e. (SED) was to be mentioned but inadvertently and by mistake the clerk concerned put the amount of Rs. 1 lakh on the challan for SED and Rs. 5,000/- on the challan of BED. At the end of the month when the R.T. 12 return was to be submitted the mistake was realised by the dealing clerk and he changed the words BED to SED and SED to BED on the T.R. 6 challan forms and sent them to the Range Staff. On receipt of a letter from the Inspector of Central Excise on 25-3-1983 the appellants stated the position in their letter dated 4-5-1983 addressed to the Asstt.
Collector of Central Excise, Ghaziabad. Subsequently show cause notice dated 15-12-1983 was issued to the appellants by the Asstt. Collector of Central Excise, Division-Ill, Ghaziabad asking the appellants to show cause as to why penalty should not be imposed on the appellants under Rule 173Q of the Central Excise Rules, 1944. The Appellants stated in their reply dated 21-2--198.4 that the mistake was unintentional and that there was no loss of revenue. The Addl.
Collector of Central Excise, Meerut, however, imposed a penalty of Rs. 10,000/- on the appellants under Rule 173Q of the Central Excise Rules.
2. Aggrieved by the said order, the appellants preferred an appeal before this Tribunal. We have heard Shri D.N. Kohli, consultant for the appellants and Shri J.P. Anand, JDR for the department and have gone through the record.
3. He entire case hinges upon the interpretation of the provisions of Rule 173Q. Sub-clause (d) of Rule 173Q lays down that a penalty can be imposed if any manufacturer contravenes any of the provisions of these rules with intent to evade payment of duty. The words "with intent to evade payment of duty" are very significant and unless and until the intention to evade duty is proved on the part of the manufacturer, no penalty can be imposed under this rule.
4. No doubt the appellants contravened the provisions of the rules by clearing the goods under the Self Removal Procedure Rules when sufficient amount in their PLA account under the head of 'Basic duty' was not available but we have to see whether there was any intention on the part of the appellants to clear the goods with intention to evade the payment of duty.
5. In this case, admittedly, the appellants deposited Rs. 1,05,000/-in their PLA Account but inadvertantly on the T.R. 6 Challan for the deposit of Rs. 1 lakh under the head of deposit 'special duty' (SED) was mentioned whereas on the T.R. 6 challan form of Rs. 5,000/- the head 'basic duty' was mentioned. This fact came to the knowledge of the higher authorities of the appellants' company, which is a limited concern on receipt of the letter dated 25-3-1983 from the Inspector of Central Excise and then they explained the entire position in their letter dated 4-5-1983 to the Asstt. Collector of Central Excise, Division III, Ghaziabad. The fact that this had happened on account of mistake and not with intent to evade duty is confirmed by the fact that on R.T. 12 return the Inspector and the Superintendent had also signed in token of having checked the same. Later on when the Inspector came to know about the mistake from the original challans he sent a letter dated 25-3-1983 which was duly replied by the appellants mentioning the entire position and showing their regret for what had happened.
6. It is not out of place to mention that the appellants are paying excise duty to the extent of Rs. 12 lakhs per month without any allegation of evading duty and the fact that the amount of Rs. 1,05,000/- stands already deposited in the government treasury, though under wrong heads, clearly indicate that there was no intention on the part of the appellants to evade the payment of duty. Even the Addl.
Collector of Central Excise, Meerut in his impugned order dated 18-4-1984 has admitted that it was only an irregularity and a genuine mistake but he took the view that this type of irregularity and genuine mistakes are not sufficient to mitigate the offence and violation of the Central. Excise Rules & Procedure.
7. In the absence of the proof of any mala fide intention on the part of the appellants and from the fact that it is a case of genuine mistake, we find that there was no intent on the part of the appellants to evade duty and therefore, we set aside the impugned order of the Addl. Collector of Central Excise and accept the appeal.