2001 (8) TMI 745 - AT - Central Excise

Summary

Issues: Jurisdiction of Assistant Collector to issue show cause notice, Merits of the case - Excess goods loaded in the Van, Provisional release of goods and duty demand, Imposition of redemption fine, Penalties imposed

Jurisdiction of Assistant Collector to issue show cause notice:
The appeal challenged the jurisdiction of the Assistant Collector to issue the show cause notice, arguing that only the Commissioner of Central Excise can issue notices related to clandestine removal under Section 11A of the Central Excise Act. The appellant contended that the notice was beyond the Assistant Collector's competence. However, the Tribunal held that the notice was issued under Rule 9(2) of the Central Excise Rules within the normal six-month period, not invoking the proviso to Section 11A. The Tribunal emphasized that the notice did not allege fraud or misstatement, and the use of "clandestine" was descriptive, not invoking Section 11A. The Tribunal distinguished this case from previous judgments, stating that the notice was validly issued by the Assistant Collector within the statutory period.

Merits of the case - Excess goods loaded in the Van:
The appellant's explanation that the excess goods in the Van were mistakenly loaded and belonged to lot No. 282 was not accepted by the authorities. The discrepancy between the excess goods in the Van and the shortage in the factory led to the rejection of the explanation. However, the Tribunal found the duty demand for the seized goods unjustified as they were cleared on provisional assessment basis, resulting in a double demand for duty on the same goods. The Tribunal set aside this demand but upheld the decision regarding the excess goods not being accepted as a valid explanation.

Provisional release of goods and duty demand:
Regarding the provisional release of goods and subsequent duty demand, the Tribunal ruled that the imposition of redemption fine was legal even after goods were released on bond execution. Citing a Supreme Court judgment, the Tribunal held that the redemption fine could be imposed despite the release of goods on bond. The Tribunal found no legal basis to set aside the demand for redemption fine and confirmed the penalties imposed in the case.

Imposition of redemption fine:
The challenge to the imposition of redemption fine based on the provisional release of goods was dismissed by the Tribunal. The legal position clarified by the Supreme Court supported the imposition of redemption fine even after goods were released on bond execution. The Tribunal found no grounds to set aside the redemption fine demand and upheld the penalties imposed in line with the facts of the case.

Conclusion:
The Tribunal allowed relief in the form of duty demand reduction but confirmed the impugned orders, subject to this relief. The judgment addressed the jurisdictional issue, the merits of the case regarding excess goods, the provisional release of goods, the imposition of redemption fine, and the penalties imposed, providing a comprehensive analysis of each aspect of the case.