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Diamond Marble Mfg. Co. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1987)(31)ELT130TriDel
AppellantDiamond Marble Mfg. Co.
RespondentCollector of Central Excise
Excerpt:
.....kumar gupta was also a worker employed in the manufacturing process, was not correct. so far as shri gupta is concerned, he had made a statement to the excise authorities on 21-1-1977 in which he had stated that he does the following items of work "1. inspection of quality of b/glass supplied inside the factory by the suppliers which are used as raw-materials in manufacture of glass marbles. 2. to check the mixing of colour materials with the raw materials (b/glass). 3. to check proper mixing of manufactured glass marbles of different colours before packing. 4. to check proper quantity of glass marbles packed in cloth bags before repacked in gunny bags. and also to check proper storing of gunny bags. 5. and ultimately i send those manufactured goods properly packed to different.....
Judgment:
1. The revision petition preferred to the Government by M/s. Diamond Marbles Mfg. Company, Howrah has been received on transfer under Section 35-P of the Central Excises & Salt Act and. is being disposed of as an appeal under this order.

2. Under his order dated 31-12-1978 the Collector of Central Excise, Calcutta, held that six or more workers were employed by the appellant in its factory and hence, the appellant was not entitled to the benefits under notification No. 90/76, dated 16-3-1976. On that conclusion he imposed a penalty of Rs. 35,000/- and also demanded duty amounting to Rs. 31,162.50 ps. relating to the period 21-10-1976 to 20-1-1977. On an appeal by the appellant against the said order the Central Board of Excise & Customs by order dated 29-5-1980 confirmed the said order except to the extent of reducing the penalty to Rs. 20,000/-. It is against the said order dated 29-5-1980 that the revision petition had been preferred to the Government.

3. Shri M. Ganesan, Advocate, appeared for the appellant., the Department being represented by Shri K.C. Sachaf, JDR, in the present proceedings.

4. The main question to be decided in this appeal is whether more than five workers were being employed by the appellant in its manufacturing process in its factory. The contention for the appellant is that there were only five workers so employed and not more. If this contention of the appellant is accepted, the appeal will have to be allowed. Another contention raised by Shri Ganesan during arguments, though not mentioned in the grounds of revision, was that with reference to the same question the Department had chosen to prosecute the appellant as well as one of its partners and an employee before the Chief Judicial Magistrate, Howrah, in case No. 86C of 1980 and by judgment dated 24-3-1982 the Chief Judicial Magistrate had acquitted the appellant as well as the other accused and the said judgment is binding on this Tribunal and, therefore, following the same the appeal has also to-be allowed. He finally contended that in any event there was no case for imposition of penalty especially in view of the letter of the Superintendent dated 31-12-1976. Shri Sachar contended to the contrary with reference to all the above submissions of Shri Ganesan.

5. The legal contention of Shri Ganesan arising out'of the acquittal of the accused by the Chief Judicial Magistrate could not be raised in the grounds of revision, since the revision had been preferred in August, 1980, the judgment of the Criminal Court being rendered in March, 1982.

The prosecution appears to have been for violation of Section 9 of the Central Excises and Salt Act, the substance of the complaint being that though the appellant was not entitled to the benefits under notification No. 90 of 1976 and had, therefore, to take out the necessary licence and maintain the necessary records and to remove the manufactured commodity alter payment of excise duty only, the appellant had failed to do so. Therefore, in that case also the main question to be decided was whether the appellant company had employed more than five workers in its manufacturing process, which is the main question to be decided in the present appeal also. No doubt, under the judgment dated 24-3-1982 the Chief Judicial Magistrate, Howrah, had acquitted the appellant of the said charge. Shri Ganesan contends that whatever may have been the position before the said judgment of acquittal, the Tribunal is now bound by the said judgment and following the same, has to necessarily allow the appeal and set aside the order of the lower authorities. In support of his contention he relied upon the decision of the Madras High Court in AIR 1952 Madras 853 as also the decision of the Patna High Court, following the said Madras decision, reported in AIR 1968 Patna 300. He also referred to the decision of the Madras High Court in AIR 1962 Madras 502. But as Shri Sachar points out, these Madras decisions have been specifically considered in a later decision in Mohd. Hussain v. Central Board of Excise & Customs (1968 Criminal Law Journal 100) where it has been observed, after considering the earlier decisions, at the end of paragraph 8 as follows : "thus the position herein seems to be clear that the proceedings before the Customs authorities are independent of the proceedings before the Criminal Court and the adjudication of the one will not be binding on the other". Another decision of the Madras High Court reported in 1967 1 Madras Law Journal H6 has also been considered in the above decision in paragraph 7 and the following passage extracted therefrom : "No doubt, it would be a strong predicament if, in spite of trial by a Criminal Court on the same facts, the domestic Tribunal were to come to a different conclusion on the same facts. But there cannot be a complete prohibition against the Tribunal coming to a different conclusion, for It is well-known that the tribunal is not bound by several rules that are binding on appreciation of the evidence by a Criminal Court." It is, therefore, clear that the judgment of the Chief Judicial Magistrate, while it may be of some persuasive value, would not be binding on this Tribunal in the sense that the Tribunal should necessarily follow the finding of the Criminal Court and dispose of this appeal in consonance with the said findings as laid down in the latter Madras decision cited by Shri Sachar. It would be open to this Tribunal to come to its own conclusion on the material placed before it unfettered by the findings of the Criminal Courts though on the same matter. The contention of Shri Ganesan, that following the judgment of the Chief Judicial Magistrate this Tribunal' must automatically allow the appeal, cannot, therefore, be accepted.

7. According to the appellant there were only five workers employed in this factory and the finding of the lower authorities that Shri "Anil Kumar Gupta was also a worker employed in the manufacturing process, was not correct. So far as Shri Gupta is concerned, he had made a statement to the Excise authorities on 21-1-1977 in which he had stated that he does the following items of work "1. Inspection of quality of B/Glass supplied inside the factory by the suppliers which are used as raw-materials in manufacture of glass marbles.

2. To check the mixing of colour materials with the raw materials (B/Glass).

3. To check proper mixing of manufactured glass marbles of different colours before packing.

4. To check proper quantity of glass marbles packed in cloth bags before repacked in gunny bags. And also to check proper storing of gunny bags.

5. And ultimately I send those manufactured goods properly packed to different parties in the market.

6. The records and documents maintained in this factory like attendance register, stock registers, etc., are written and maintained by me.

Preparation of Bill, Challan for the goods despatched to the party and purchaser, defective materials from the market for the factory.

There is another man designated as watchman named Subhash. He performs the duty, in the night only and his duty is to look after the factory side." Items 1 to 3 of the above list would normally be sufficient to establish that Shri Gupta was also engaged in work relating to the manufacturing process, though his designation may be clerk/salesman. In that event he should also be included in the number of workers for deciding upon the benefit of notification No. 90/76. Under the said notification the benefit thereof shall not be extended to factories wherein six or more workers are working or were working on any day of" the preceding 12 months.

8. But the contention for the appellant is that the statement of Shri Gupta dated 21-1-1977 was not voluntarily made and did not reflect the truth and that he had been compelled to put his signature to such a statement after the Central Excise officials dictated a statement in their own way and compelled him to sign the same under threats. Shri Ganesan relies upon an affidavit of Shri Gupta dated 15-2-1977 in support of this contention. In the said affidavit Shri Gupta had chosen to state that he sits in the office only to discharge his duties and takes no part in the production process and that he disowns the correctness of the statements in the statement recorded on 21-1-1977, insofar as they are inconsistent with the averments in this affidavit.

The contention for the Department is that the statement dated 21-1-1977 had been made by Shri Gupta voluntarily and of his own free will without any coercion or threat on the part of the officials and that later, at the instigation of the partners of the appellant firm, he had chosen to retract from the said statement under the affidavit dated 15-2-1977.

9. We are satisfied that it is the contention of the Department that has to be accepted in this connection. The statement dated 21-1-1977 is in the hand-writing of Shri Gupta and, as pointed out by the Collector in his order, the manner in which the statement is worded and the clerical mistakes therein, show that the statement must have been the free statement of Shri Gupta and not made to the dictation of the officials. Nor has it been proved through any evidence during the adjudication that any threat or coercion was exercised to obtain the statement of Shri Gupta on 21-1-1977. Shri Gupta was the third accused in the criminal case. The statement on 21-1-1979 does not appear to have been brought on record as evidence in the criminal case and so was not considered by the learned Chief Judicial Magistrate in his judgment. In the circumstances, it has to be necessarily held, on the basis of the same statement, that though Shri Gupta may have been designated as clerk/salesman, he was, in fact, attending to work connected with the manufacturing process also and should, therefore, be counted amongst the number of workmen employed in the factory. In that event, the number of workmen would be necessarily more than five. On that conclusion it has to be necessarily further held that' the appellant was not entitled to benefit under notification No. 90/ 1976, dated 16-3-1976. On this conclusion the appellant was bound to pay the duty demanded and was also liable for payment of penalty.

10. But Shri Ganesan contends that this case is not really one in which any penalty should have been imposed in view of the letter of the Superintendent dated 31-12-1976. He relies upon the following sentence in the said letter : "Regarding the duty liability on the products in question, in respect of which, you have preferred an appeal to the Assistant Collector, it is to inform you that the decision in this respect will be communicated after the completion of further investigation." The argument is that as the matter of duty liability was thus under consideration by the Assistant Collector, there could be really no case of willful infraction of any of the statutory provisions and there was, therefore, no need for imposition of a penalty. But it may be seen that under earlier letter dated 21-10-1976 the appellant had indicated that they will not be employing more than five workers and had, therefore, claimed exemption but that in reply thereto under letter dated 3-12-1976 itself the Superintendent had rejected the said claim and has specifically indicated that licence should be applied for and manufactured product should be cleared only in accordance with rules after payment of duty also. It is thereafter that licence had been applied for though under protest and it is in that connection that the Superintendent had written the letter dated 31-12-1976 referring to the appeal preferred also. In these circumstances, the continued infraction by the appellant cannot be said to be an act without the requisite mens rea so, as to exclude a case requiring imposition of penalty. We are satisfied that the appellant was liable to pay penalty. The quantum of penalty has been reduced by the Board under its order and we see no reason to reduce it further.

11. In the result, the order of the lower authorities is confirmed and this appeal is dismissed.


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