2002 (1) TMI 1027 - AT - Central Excise

Summary

Issues involved:
Seizure of goods, compliance with Central Excise formalities, validity of documents, confiscation of goods, imposition of redemption fine and penalty.

Seizure of goods:
The case involved the seizure of HR coils in transit by the Preventive staff of Central Excise Division I, Ludhiana. The goods were intercepted on a truck bearing a specific invoice, and discrepancies were found regarding the documentation and excess stock at the Sales Depot of the noticee No. 1. The seizure was made under Section 110 of the Customs Act, 1962, as applicable to Central Excise matters. The noticee No. 1 failed to provide a plausible explanation for the excess stock, leading to the seizure of the goods valued at Rs. 1,85,07,786.

Compliance with Central Excise formalities:
The appellant contended that the manufacturer/supplier had fulfilled all Central Excise formalities, but the noticee No. 2, the sales depot, failed to maintain proper statutory records and comply with the prescribed procedures. The invoices issued contained false information, and discrepancies were found in maintaining the RG 23D register and filing monthly returns. The Tribunal held that the provisions of Rule 57GG were mandatory and substantive, not merely procedural, as per the decision in the case of M/s. Balmer Lawrie and Co. Ltd. v. Commissioner of Central Excise, Kanpur.

Validity of documents and confiscation of goods:
The noticee No. 1 claimed to have sold the goods to M/s. Hero Cycles Ltd., but conflicting statements arose regarding the actual transaction and delivery of the goods. M/s. Hero Cycles Ltd. denied placing any purchase order for the seized goods, undermining the defense presented by noticee No. 1. The Tribunal found that the goods were not cleared under valid invoices, leading to the confiscation of the goods. The Commissioner's decision to confiscate the goods and impose a redemption fine and penalty was upheld.

Imposition of redemption fine and penalty:
While confirming the confiscation of the goods, the Tribunal considered the redemption fine and penalty imposed to be on the higher side. In the interest of justice, the Tribunal directed the appellants to pay a redemption fine of Rs. 10 lakhs and a penalty amounting to Rs. 5 lakhs, thereby disposing of the appeal in those terms. The decision balanced the enforcement of Central Excise laws with a fair imposition of financial penalties.