ZAFFAR HUSSAIN MIRZA, J.--This appeal by Special Leave arises out of the order dated 4-5-1973 whereby a D. B. Of the erstwhile High Court of Sind & Baluchistan, Karachi, dismissed in limine, the constitutional petition filed by the present appellant under Article 201 of the Interim Constitution of the Islamic Republic of Pakistan.
2. The appellant owns a cotton yarn factory and the goods produced therein at the relevant time were subject to payment of central excise duty payable under subsection (1) of section 3 of the Central Excises and Salt Act, 1944. The Central Excise Rules, 1944, framed under the aforesaid Act, make elaborate provision in relation to the keeping regular check of produc--tion at various stages, storage, deliver) and gate passes, realization and collection of the excise duty. Rule 47 provides that the manufactured goods may be stored without payment of duty in a store room or place declared to and approved by the Collector. All goods stored or removed from such godown upon payment of duty have to be declared in a prescribed form on the Form EB. 4 by which reference the godown itself is referred to as EB. 4 Godown. Rule 48 provides that the manufacturer shall enter into bond for the payment of duty and rule 59 lays down that the duty shall be chargeable only on removal of the goods from the factory premises or from an approved place of storage. Rule 51 provides for the packing and weighment of the goods, requiring that as soon as practicable after the excisable goods are packed and weighed or otherwise made ready for removal from the factory, the same should be deposited in an approved store room or other place of storage. Daily stock accounts are to be maintained in Form RG. I/showing daily, the weights, description and the rating of excisable goods which are manufactured, deposited in store room other than EB. 4 Godown or removed after payment of duty from the store room or delivered from factory for export without payment of duty. Thus form RG. 1 has relation to the place where the goods are lastly and finally packed and made ready for final storage or removal on payment of duty and the place or godown is referred to as the R G. 1 Godown.
3. The case of the appellant is, that it normally maintained its books of account according to the rules and it also kept the yarn meant for export only in the EB. 4 Godown. However, at the beginning of March, 1971, it felt some difficulty and had, therefore, not stored the yarn produced by the factory for export in the E B. 4 Godown. As ill-luck would have it there was a raid on its factory on 11-3-1971 by a Deputy Superintendent of the Central Excise and Land Customs. It was revealed, on inspection by the raiding party, that a large quantity of goods was lying in the R G. 1 Godown on which excise duty had not been paid. The raiding party also found that the appellant's stock register was not up to date. The goods comprising 192 wooden cases and 23 bags were seized. Accordingly, a Show- Cause Notice dated 8-4-1971 was served on the appellant by- the Deputy Collector, Central Excise and Land Customs, Karachi for action under rules 210 and 226 of the Central Excises Rules, 1944.
This Show-Cause Notice stated that the Central Excise Preventive Officers visited the R G. 1 section on 11-3-1971 at 5.30 p. m. And found that huge stock of cotton yarn of different counts were lying in the marketable condition, details of which were as under:-
(i) 94 cases duly secured with iron nails double hooped with iron strips.
(ii) 98 cases fastened down with iron nails without being hooped.
(iii) Count numbers were also written on all cases and bags.
(iv) One wooden case of 21/s was opened and found to contain cones duly wrapped in plastic bags containing slips showing weight and retail price in rupees.
(v) 23 bags containing cotton yarn in marketable condition.
(vi) RG. 1 Register, with reference to the actual stock found in R.G.Godown at about19-00 hours showed the closing balance of 11-3-1971 as one bag (100 Ibs), whereas actually 23 bags (2300 Ibs) were found stored in the godown. Thus showing an excess of 22 bags-
(vii) Page-3 of RG. I Register showed 62 cases (12400 lbs) of 21/s, whereas 100 cases (20000 lbs) were discovered. Thus showing an excess of 38 cases.
(viii) The entries were only made up to 10-3-1971.
4. In their reply to the Show-Cause Notice, dated 24-4-1971, the appellant did not dispute the facts alleged in the Show-Cause Notice, but its explanation was, that due to shortage of space, it was intended to extend the EB. 4 Godown and pending extension, to store the goods elsewhere.
Accordingly it bad informed the Superintendent of Central Excise under its letter dated 3-3-1971 (duly acknowledged on 5-4-71). It was in these circum-- stances, according to the appellant, that the goods produced in the factory, stored in R. G. 1 section temporarily, which became an "approved place of storage" for the time being. As regards the entries in the Register, its explanation was that the mill's day is reckoned from 3-00 p. m. Of one day to 3-00 p. m. Of the next day. Therefore production reports are compiled after 3 p. m. And, after attestation by the Central Excise Inspector at the factory entered in the excise record. Thus 92 cases of yarn of 32/s and 62 cases of yarn of 21/s lying stored in the RG. 1 section pertained to previous production and were duly entered in the said Register for 10-3-1971. For the rest of the goods, it was stated that these goods were production of 11-3-1971 after 3-00 p.m. Which would have been entered in the Register in due course by 6 p. m. On the same day, but the raiding party had in the meantime visited the Godown at 5-30 p. m.
5. By order dated 11-8-1971, the Deputy Collector, Central Excise & Land Customs, Karachi found the charges made against the appellant to have been established and, therefore, he ordered 25 cases of cotton yarn of 21/s, one bag of 32/s, 92 cases of 32/s and 68 cases of 21/s cotton yarn to be confiscated under rule 210, allowing, however, the option to the appellant to pay penalty in lieu of confiscation in addition to the duty livable thereon. 1.3 cases of 21/s and 22 bags of 32/s were released to the appellant which were to be entered in the relevant Register in presence of the Central Excise Officers. Finally a penalty of Rs. One lac was imposed under rule 226 of the Central Excise Rules, 1944. The appeal filed by the appellant was dismissed by the Collector of Central Excise & Land Customs, Karachi by his order dated 9-10-1971, on the short ground that appellant had not deposited the amount of penalty as required under the provisions of section 35(1-A) of the Central Excises and Salt Act, 1944. The appellant thereupon filed a revision before the Government of Pakistan which was dismissed by the Member of the Central Board of Revenue, by his order dated 20-2-1973.
6: The appellant, then, challenged the aforesaid orders passed by the Departmental Authorities in a writ petition before the High Court. The High Court came to the conclusion that as regards the discrepancies in the R G. 1 Register, the plea of the appellant that requisite entries in the Register could not be made for want of time, since the raiding party inter--cepted before the same could be entered, was properly considered by the Deputy Collector in a well-considered order and rejected. This being a question of fact, the High Court was of the opinion that, it was unable to enter into the same in constitutional jurisdiction. It was further pointed out that the contention that the appellant could complete its Register up to 6-00 p. m. On the basis of certain instructions issued by the Collector, not having been raised before the Departmental Authorities, could not be allowed to be raised before the High Court.
7. On the charge relating to storage of yarn meant for export admittedly kept in RG.1 Godown instead of in EB. 4 Godown, the explanation of the appellant was found to be far-fetched and had also been rejected by the Deputy Collector on material available on his record consisting of slips showing the retail prices in Pakistan rupees, etc. Additionally, it was observed, the explanation that temporarily the goods were stored in RG. 1 Godown, as intimation had already been given to the Superintendent was found untenable because the alleged letter granting sanction was dated 5-4- 1971 and could not, therefore, validate an illegality committed on 11-3-1971. In this view of the matter, the learned Judges of the D. B. Dismissed the petition of the appellant in limine.
8. Leave to Appeal was granted by this Court to examine the following contentions:- (1)That the liability to maintain the daily stock account under rule 53 of the 1944 Rules read with rule 51 ibid was not absolute and that the requirement of the Rules is satisfied if the entries are made "as soon as practicable after the expiry of a "mill day"; (2)that the "raid" of the petitioner's premises by the preventive Officers at 5-30 p. m. On 11-3-1971 prevented petitioner from completing the entries in the relevant register within half an hour before 6-00 p. m. As provided by S. I. 4/6 referred to above ; (3)that pursuant to the petitioner's communication dated 3-3-1971 addressed to the Superintendent, Central Excise, to which a reply was received "in due course" on 5-4-1971, the petitioner was allowed to extend EB. 4 godown and also to make alternative arrangement during the interval for the deposit of finished goods for export ; (4)that the provisions of the rules being penal, the petitioner could not have been penalised unless there was a finding of mens rea and there was no material to show that the petitioner had dishonestly intended to remove from R. G. 1 godown without payment of excise duty; and
(5) that the refusal of the Collector to exercise his discretion under proviso to subsection (1-A) of section 35 of the Act, to dispense with the deposit of penalty and fine, was capricious.
9. The learned counsel for the appellant has reiterated the same contentions before us at the hearing of this appeal Before taking up the consideration of the contentions advanced in support of this appeal, it may be stated that the nature of the charges against the appellant for which the impugned penal action was taken, was that firstly, the appellant had in breach of the relevant Rules, failed to maintain proper entries in its account books as regards the excisable goods deposited in its store room RG. 1; and secondly, that these goods were deposited in a store room which was not an approved place of storage for packed and weighed goods, which were ready for removal from the factory. The contentions of the learned counsel may now be taken up in seriatim.
10. The scheme of the Central Excise Rules, 1944 (hereinafter referred to as the Rules), so far as it is relevant for the present purposes, may now be briefly examined. Under rule 7 duty has been made payable, inter alia, on excisable goods on production or on storing such goods in a warehouse. Rule 9 provides that no excisable goods shall be removed from any place where they are produced or manufactured, until the excise duty livable thereon has been paid at such place. The proviso to this rule lays down: "Provided that such goods may be deposited without payment of duty in a store room or other place of storage approved by the Collector under rule 140 or may be exported under bond as provided in rule 13."
Then rule 47, which is particularly relevant to the present case, provides as under: "(47) Goods may be stored without payment of duty.---(1) A manufacturer may provide a store room or other place of storage on his premises for depositing goods made on the same premises without payment of duty subject to the condition that no goods shall be stored in the store room for more than three years.
(2) No duty-paid goods and no goods other than excisable goods made in the factory shall be deposited in such store room or place.
(3) Every such store room or place shall be declared by the manufacturer and approved by the Collector.
(4) The manufacturer shall maintain an Entry Book in the proper form in which he shall on the same day on which goods are deposited in or removed from such store room or other place of storage, write and enter in the proper column the date of such deposit or removal, the full description, quantity, weight and value of the goods so deposited or removed, the number of, and the marks and number on, the packages (if any) in which they are contained and such other particulars as the Central Board of Revenue or the Collector may by general or special order require."
Now rules 51 and 53 (so far as relevant) relied upon, in regard to the first contention, may also be set out as follows:- "(51) Packing and weighment of goods.-Unless specially exempted by the Collector by order in writing, every manufacturer shall, as soon as practicable after any excisable goods are packed and weighed in the factory or otherwise made ready for removal from the factory--- (i)mark on each package the quantity of the goods contained therein and a factory number or distinguishing letter denoting the kind and quality of the goods;
(ii) deposit the goods in an approved store room or. Other place of storage."
"(53) Daily Stock Account.--(1) Every manufacturer shall maintain a stock account in the proper form, or in such other form as the Collector may in any particular case allow, and shall enter in such account daily the weights, description and rating of all excisable goods which are--- (a)manufactured: (b)deposited in the store room or other place of storage approved by the Collector under rule 47;
(c) removed, after payment of duty, from such storeroom or other place of storage or from the place or premises specified under rule 9; (d)delivered from the factory for export without payment of duty; (e)transferred to a warehouse appointed or licensed under rule 140 and shall, for at least twelve months after any stock account has been filed up, preserve the account and keep it available for inspection by any officer.
(2) Every manufacturer shall, at the close of each working day, legibly display on a notice board to be maintained at a prominent place at or main entrance to the factory in the proper Form particulars of clearances of excisable goods of that day and shall keep such particulars so displayed for the next three days. Every manufacturer shall also display on such board a consolidated statement of clearances during the immediately preceding month in the proper Form and shall keep such statement so displayed for the sixty days following the close of the month."
The plain reading of rule 47(4), shows that the manufacturer is required to maintain an Entry Book, in which he has to write and enter the full particulars, of the goods deposited, in a store room or other place of storage on his premises, on the same day on which the goods are so deposited.Now the argument of the learned counsel is that the entries in the daily stock account, if made, "as soon as practicable after the expiry of mill day" would-- be sufficient compliance with rule 53. It is clear from clause (b) of rule 53, that the latter Rule has to be read along with rule 47. The requirement of rule 47, sub-rule (4), clearly is that entries are to be made in the Entry Book on the same day on which goods are deposited in the store room, approved by the Collector, in which in the proper column the "date" of such deposit is to be entered. Similarly the requirement of rule 53, on the plain language of the Rule, is that entries in the daily stock account are also to be made "daily". The finding of the Deputy Collector was that 25 cases of 21/s being the production before 3 p. m. Of 11- 3-71 were found not entered in the R: G. 1 Register and that by 5-30 p. m. On the said date such entries could be easily made. If the mill day was from 3-00 p. m. Of the previous day to 3-00 p. m.
Of the following day, apparently the entry was not made on the same day or the "mill day" as put by the appellant in terms of rule 47(4). It, therefore, appears to us that the charge against the appellant of breach of rule 53 was established on the material on record. The expression "as soon as practicable" does not find place anywhere in rule 47 or 53 and we are unable to see how this expression occurring in rule 51 can be imported in the interpretation of rule 53. The last mentioned rule relates to marking of packages with the quantity and factory numbers on them and depositing the same in an approved store room or other place of storage. This rule does not appear to deal with the maintaining of any account book or making of any entries. Before the High Court the argument of the appellant was that since the raid had taken place at 5-30 p. m., there was no sufficient time at the disposal of the appellant to make the entries, which was repelledon the ground that, this being a question of fact which had been property considered by the departmental authority and a finding given thereon, the was unable to enter into this question in its constitutional Jurisdiction. No exception can be taken to the view taken by the High Court.
11. The next contention of the learned counsel was that in terms of Supplementary Instruction No. 4 of 1963 issued by the Central Board of Revenue, manufacturers were allowed to make entries in the account of excisable goods in R G. I Registers by "6-00 p.m. Each day and all production after that hour should be taken into account in R G. 1 Register next day by 6-00 p. m.". The submission was, that but for the interception of the raiding party at 5-30 p. m. On 11-3-1971, the appellant would have made such entries within the stipulated period, but was prevented to do so on account of the raid. Since this was not the part of appellant's case before any departmental authority, the learned Judges of the High Court did not permit the appellant to raise it before them. The soundness of this reason has not been challenged before us and we find that the principle is well settled that no new case on facts can be permitted to be raised for the first time in the constitutional jurisdiction of the High Court, in cases where special statutory tribunals have been conferred exclusive jurisdiction over certain matters. The High Court is not a Court of enquiry into facts. Additionally no provision of law was referred to us whereby such instructions can have the force of law. We also find that on a plain reading of the alleged instructions they do not appear to relate to the category of goods in question, namely, cotton yarn, which is not one of the items mentioned in the said instructions.
12. The third contention relates to the second charge made against the appellant, that the goods were found stored in RG. 1 Godown, when they should have been removed to EB.4 Godown. The explanation of the appellant, as already mentioned, was that this was done in pursuance of a request contained in appellant's communication dated 3-3-1971 addressed to the Superintendent for permission to store the goods in R G. 1 Godown, because EB. 4 Godown was full to capacity. The reply to this letter was issued on 5-4-1971, which reads as under :-- "You are advised to extend your E B. 4 Godown. All goods stored should be removed to E B. 4 Godown within 10 days from the receipt of this letter."
This plea was rejected by the Deputy Collector, on the ground that since no permission was received by the appellant before 5-4-1971, they were not entitled to store packed goods in R G. 1 Godown. It was further found as a fact that the Seizing Officers had reported that there was sufficient space in the EB. 4 Godown to store the packed goods which were lying in the RG, 1 premises. The plea of the appellant that these goods were meant for export was also found incorrect in view of the fact that slips were found attached to the packages showing retail price in Pakistan currency. It is clear from these findings of fact that there was no justification for the appellant to store the packed goods in RG. 1 Godown at the relevant time. As already discussed above, under rule 51, unless specially exempted by the Collector by order in writing every manufacturer has to, as soon as practicable after any excisable goods are packed and weighed in the factory, deposit the goods in an approved store room or other place of storage. Under rule 47
(3) every such store room or place, has to be declared by the manufacturer and approved by the Collector. Consequently placing of goods in a store room or place not so approved constitutes a breach of rule 51.On the relevant date in question the appellant was admittedly not armed with an order in writing from the Collector. The contention, therefore, has, no merit.
13. In support of the next contention, it was argued that before inflicting the penalty, it was incumbent on the relevant authority to be satisfied that the acts alleged against the appellant were dishonestly done in order to remove the goods from RG. 1 Godown without payment of excise duty. --The submission was that mens rea is an essential ingredient of an offence punishable under the penal laws of the land and it was incumbent upon the Department to establish that the acts alleged against the appellant were committed with guilty mind. The same proposition came under consideration by this Court in the case of Pakistan v. Hard Castle Waud (Pak.) Ltd.
PLD1967SC1. In connection with Item 37-B of section 167, Sea Customs Act, 1878. The provision under interpretation reads as under: "The offences mentioned in the first column of the following Schedule shall be punishable to the extent, mentioned in the third column of the same with reference to such offences respectively OffencePenalties "37-B.--Where goods haveBoth the goods so declared and been declared on a bill ofthe goods not so declared shall entry or shipping bill, as thebe liable to confiscation, and case may be, and it is foundevery person concerned in any that goods not so declaredsuch offence shall be liable to have been concealed in, ora penalty not exceeding one mixed with, the goods sothousand rupees." declared.
Briefly the facts of the case were that in a consignment imported in Pakistan, the clearing agents, acting on behalf of the indentors, filed the usual docu--ments for taking the delivery of the goods, in conformity with the indents, which were for the import of cycle lubricating oil. On a check, however, it transpired that the consignment contained lubricating oil as well as certain other goods which were not declared. The Customs Autho--rities, after following the usual procedure penalised the importers and the indenting agent for misdeclaration of the imported goods and for importing goods, not covered by an import licence. After exhausting the statutory remedies unsuccessfully, the order was challenged in the writ jurisdiction before the High Court, who held that the Customs Authorities had not proved or established that the false declaration, or the fraud practised upon them, was false to the knowledge of the petitioners and, therefore, no liability was incurred by them.
The matter was then brought before the Supreme Court and S. A. Rahman, J. Who wrote the judgment for the majority observed "It was strenuously contended on behalf of the respondents, that even Item 87-B required a mens rea to be proved before penal action could be taken against a person concerned. It seems to us that this con--tention is devoid of substance. The language of section 167 (37-B) suggests that this is a case of absolute statutory liability. The only condition of the attachment of this liability is that it should have been found as a fact that the goods not declared to the Customs Authorities were concealed or mixed with the goods so declared. There are no words in this item which could justify placing it on a par with section 39 of the Act which requires that an oral or written statement in a document should be "untrue" and not merely false."
On a parity of reasoning, we find the penal provisions in the present case also create an absolute liability and there is no room for importing the ingredient of mens rea to establish an offence thereunder. The penal action in the present case has been taken under rules 210 and 226 of the Rules. These rules, so far as relevant for present purposes, read as under: "226.--(1) Where any person is required by these rules to maintain any entry book, stock account, or warehouse register in respect of goods produced, manufactured or stored by him ------..He shall- -
(ii) correctly keep such book, account or register in the manner required, and shall not cancel, obliterate, or alter any entry therein, except for correction of any errors, with the sanction and in the presence of the proper officer, and shall not make any entry therein which is untrue in any particular ;
(iii) any person who fails to enter the required particulars within the time prescribed in the relevant rules, shall be liable to a penalty which may extend to two thousand rupees or ten times the amount of duty involved, whichever is greater, and all the goods of which due entry has not been made in such book shall be liable to confiscation.
210. A breach of these rules shall, where no other penalty is provided herein, be punishable with a penalty which may extend to two thousand rupees or ten times the amount of duty involved, whichever is greater and with confiscation of the goods in respect of which the offence is committed."
It appears to us that on a reading of the aforesaid penal provisions, it is clear that no mental ingredients in respect of the breach of rules 51 and 53 are required to be proved, except the fact that the person c8'ncerned failed to deposit the goods in an approved place of storage or failed to make the necessary entries in the relevant account book within the time prescribed in the relevant rule.
14. Be that as it may, the findings of fact reached by the Deputy Collector in his order clearly establish, that the acts alleged against the appellant were knowingly committed which is clear from the following observation: - "The goods completely packed in marketable condition should have been removed to the EB. 4 Godown instead of keeping the same in the RG. 1 premises endangering Government revenue in complete violation of Central Excise Rules and Procedure As regards the space in the EB. 4 Godown, the Seizing Officers have reported at the time of hearing - that there was sufficient space in the EB.
4 Godown to stock the packed goods which were lying in the RG. 1 premises. The plea taken by the party that goods were meant for export is also not maintainable in view -of the fact that the slips showing the retail price and weights were put in every one which are not necessary in case of exportable goods."
15. The principle that it is not necessary for the departmental authority to state that the acts were consciously and deliberately done by the person proceeded against, was laid down in the case of Pakistan v. Hard Castle Waud (Pak.) Ltd., already referred to. It was held in that case that it is sufficient if the authority concerned recorded findings of fact, from which such an inference necessarily followed. Applying the same principles, we' find in this case also that the findings of fact reached by the Deputy Collector give rise to the inference that these acts were done consciously and deliberately. There is thus no substance in this contention.
16. The last contention is also without merit, as there is nothing on the record showing that any request was made on behalf of the appellant for dispensing with the deposit of penalty and fine to the Collector and as such we are unable to hold that the discretion was exercised capriciously. In any case, the appellant has not pointed out any circumstances causing undue hardship to it, justifying the suspension of the penalty levied.
17. For all the aforesaid reasons, there is no merit in this appeal, which is accordingly dismissed with no order as to costs.