2002 (5) TMI 383 - AT - Central Excise

Summary

Issues:
Seizure of goods under small scale exemption notification, non-maintenance of proper records, confiscation of unaccounted goods, imposition of penalty under Central Excise Rules.

Seizure of Goods under Small Scale Exemption Notification:
The appellant appealed against the order related to the seizure of goods under the small scale exemption notification. The appellant argued that they were entitled to clear goods up to Rs. 30 lakhs without duty payment, having already cleared goods worth Rs. 27,20,000. The seized goods were valued at Rs. 2,17,000, which, when added to the total clearance, remained below the exemption limit. The appellant admitted to not maintaining proper records. The advocate cited a case where unaccounted goods in the factory were not eligible for confiscation, emphasizing the absence of mens rea to evade duty. The appellant contended that no duty evasion occurred as duty was payable only upon clearance of goods, not storage. The Tribunal found no mens rea against the appellants, setting aside the impugned order and imposing a penalty of Rs. 2,000 under Rule 226.

Non-Maintenance of Proper Records:
The appellant failed to maintain proper records, leading to discrepancies in the clearance of goods and the seized unaccounted goods. Despite the lack of proper documentation, the appellant argued that no duty evasion took place as duty was payable upon clearance, not storage. The advocate highlighted the reply asserting that the goods were cleared under the exemption limit and no duty was evaded. The Tribunal considered the absence of mens rea and imposed a penalty of Rs. 2,000 under Rule 226 for record-keeping non-compliance.

Confiscation of Unaccounted Goods:
The issue of confiscation arose concerning unaccounted goods found in the factory premises. The advocate contended that confiscation was not applicable as the goods were not cleared and duty was payable only upon clearance, indicating no intention to evade duty. Citing a precedent, the appellant argued that unaccounted goods in the factory were not liable for confiscation in the absence of mens rea. The Tribunal, after considering the arguments and case laws, found no mens rea against the appellants and set aside the impugned order, imposing a penalty of Rs. 2,000 under Rule 226.

Imposition of Penalty under Central Excise Rules:
The imposition of a penalty under Central Excise Rules was a key issue in the judgment. The advocate argued that no penalty beyond Rs. 2,000 under Rule 226 should be imposed due to the absence of mens rea for duty evasion. The Tribunal, after reviewing the submissions and case laws, concurred that no mens rea was established against the appellants. Consequently, the impugned order was set aside, and a penalty of Rs. 2,000 under Rule 226 was imposed on the appellant, concluding the appeal proceedings.