G. Sankaran, Vice President

1. The captioned appeal was originally filed as a revision application before the Central Government against order-in-appeal No. 312-B of 1981 dated 30-6-1981 passed by the Central Board of Excise and Customs. On the setting up of this Tribunal, the revision application was transferred to it in terms of Section 35P(2) of the Central Excises and Salt Act, 1944, to be disposed of as if it were an appeal filed before the Tribunal.

2. The facts of the case material and relevant for our purpose may be briefly stated. M/s. Bata India Limited (hereinafter, for brevity's sake, "Bata") had manufactured during the period 1975-78, 70 shoe-making machines classifiable and chargeable to excise duty, under item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (the "CET" and the "Act" respectively). Some of these machines were cleared from the factory for sale to other parties and some were used within the appellant's factory for shoe-making. They were cleared, or used, in the manner aforesaid, without payment of the excise duty leviable thereon and without observance of the excise formalities under the Central Excises Rules, 1944 (hereinafter the "rules"). It appears that the matter came to notice during audit of the Bata Factory and the department wrote to Bata on 4-1-1979 on the subject enquiring about the details of the machines manufactured since 1975. It appears that soon thereafter Bata realised their default and offered to pay the leviable duty immediately. The duty was paid as per Bata's calculations on 19-3-1979. The Superintendent of Central Excise issued a notice dated 22-2-1979 calling on Bata to show cause why the amount of Rs. 46,243.34 should not be recovered from them towards the duty leviable on aforesaid machines, in terms of rule 9(2). Bata replied regretting their error and contending that the lapse was entirely unintentional. On 5-9-1979, the Superintendent issued a corrigendum to the effect that cause was to be shown to the Collector and not the Assistant Collector as earlier directed. It appears that prior to this corrigendum, the Assistant Collector had heard Bata and reserved his order. On 27-6-1980, the Collector issued a fresh notice in supersession of the notice dated 22-2-1979. By this notice, it was alleged that Bata had contravened rule 173PP. Bata was called upon to show cause to the Collector why penalty should not be imposed under rule 173Q and duty amounting to Rs. 46,243.34 should not be demanded from the under rule 9(2). Bata replied on 8-7-1980 on the same lines as they had done with reference to the Superintendent's notice, on 12-8-1980, the Collector issued a corrigendum to the show cause notice clarifying the amount of duty was amended to Rs. 1,65,834.22 at 8% ad valorem. Bata replied on 3-10-1980 contending that duty could be levied only at the rate prevalent on the date of manufacture and/or clearance and not at a rate in force on the date of payment of duty. They pleaded that the duty already paid by them should be deemed to be the correct amount of duty payable. In due course, the Collector passed an order on 3-10-1980, holding the charges against Bata as established. He imposed a penalty of Rs. 1,25,000/- on Bata and ordered that they should pay duty of Rs. 1,65,834.72 minus the duty already paid by them. On appeal, the Board passed an order dated 30-6-1981 (now under challenge before us) reducing the penalty to Rs. 25,000/-. The Board observed that the goods had been cleared without payment of duty and without compliance with the formalities under the rules and, therefore, it could not be said that the goods had been 'cleared' or 'removed' in a manner so as to attract the provisions of Rule 9A (i)(ii). The applicable rule, in the circumstances, was Rule 9A(5), held the Board and consequently it confirmed the Collector's order demanding duty at the higher amount.

3. We have heard Shri S.K. Bagaria, Advocate for the appellant and Shri K.C. Sacha