2000 (11) TMI 1054 - AT - Central Excise

Summary

Issues:
1. Alleged clandestine removal of goods to evade payment of Excise duty.
2. Confiscation of seized goods and vehicle.
3. Imposition of penalty and appropriation of Bank Guarantee.

Issue 1: Alleged clandestine removal of goods to evade payment of Excise duty

The case involved the appellant, a Small Scale Industry (SSI) unit, being accused of clandestinely removing UF resins to evade Excise duty. The investigation revealed the removal of goods without payment of duty, leading to a show cause notice being issued. The appellant was called upon to show cause regarding the duty demand, confiscation of goods, and imposition of penalties under various Central Excise Rules. After a personal hearing, the Commissioner confirmed the duty demand, imposed a penalty of Rs. 25,000, and ordered the provisional release of seized goods and vehicle upon execution of a bond. The appellant contested the charges, arguing lack of mala fide intent and excessive penalty.

Issue 2: Confiscation of seized goods and vehicle

The appellant was alleged to have removed UF resins without paying Excise duty, leading to the seizure of goods and the vehicle used for transportation. The Commissioner ordered the provisional release of the seized items upon execution of a bond, with a Bank Guarantee of Rs. 30,000. The appellant was required to produce the goods before the Adjudicating Authority, failing which the security amount could be appropriated. The appellant argued that the appropriation of the Bank Guarantee was premature and cited a relevant case law to support their contention. The Tribunal, after considering the facts and circumstances, set aside the order for the appropriation of the Bank Guarantee and reduced the penalty imposed.

Issue 3: Imposition of penalty and appropriation of Bank Guarantee

The appellant challenged the penalty imposed under Rule 173Q of the Central Excise Rules, contending that the amount was excessive given their cooperation in paying the duty and admitting the lapses. The appellant highlighted their lack of familiarity with Central Excise procedures as a small SSI unit. The Tribunal observed that the appellant was not specifically asked to produce the seized goods and vehicle on a particular date, and the show cause notice was deemed vague and general. Considering the appellant's actions in debiting and paying duty amounts, admitting mistakes, and showing bona fides through records, the Tribunal reduced the penalty from Rs. 25,000 to Rs. 10,000. The Tribunal allowed the appeal, setting aside the appropriation of the Bank Guarantee and confirming the duty demand and payment adjustments.

This detailed analysis of the judgment provides insights into the issues of alleged clandestine removal of goods, confiscation of seized items, imposition of penalties, and the Tribunal's decision to set aside the appropriation of the Bank Guarantee and reduce the penalty amount.