2001 (12) TMI 365 - AT - Central Excise

Summary

Issues:
Confiscation of electronic wires and cables, imposition of penalty.

Analysis:
The appeal involved the confiscation of electronic wires and cables along with the imposition of a penalty. The appellants, engaged in manufacturing power control cables, availed Modvat credit of inputs under the Modvat Scheme. During a physical verification of their stock, an excess of power control cables valued at Rs. 11,95,078/- was found, leading to a Show-cause Notice being issued. The appellants claimed that the goods were not fully finished and were yet to be inspected as they were being supplied against specific orders from various Government Departments. They argued that the goods had not reached the RG-1 stage and cited inspection certificates in support of their contention. The Adjudicating Authority confiscated the goods and imposed a fine of Rs. 3.0 lac along with a penalty of Rs. 2.0 lac under Rule 173Q read with Rule 226.

The appellants contended that there was no intention to evade payment of duty, citing precedents where confiscation was not justified without establishing intent. They argued that Rule 173Q was not applicable to their case and that at most, a penalty under Rule 226 for non-accountal of excisable goods should be imposed, with a maximum penalty of Rs. 2,000/-. On the other hand, the Respondent argued that the goods were rightfully seized, and the value of the goods warranted both confiscation and penalty. The Respondent emphasized that the goods were not accounted for properly and that the case fell outside the scope of previous Tribunal decisions.

Upon examination, the Tribunal found that the inspection certificates provided by the appellants did not substantiate their claim that the goods were yet to be inspected before being recorded in the RG-1 register. The Tribunal also noted that the Managing Director's statement did not support the argument that the goods were pending inspection by the Ministry of Railways. It was observed that while non-accountal of the goods was established, there was no evidence of mens rea to justify confiscation under Rule 173Q. However, the Tribunal upheld the imposition of a penalty under Rule 226 due to the unaccounted goods' high value, ordering the confiscation of the goods along with a redemption fine of Rs. 50,000/-. The impugned order was upheld with the mentioned modifications, and the appeal was disposed of accordingly.