2001 (1) TMI 801 - AT - Central Excise

Summary

Issues Involved:
1. Allegation of double transportation of excisable goods.
2. Clearance of samples without valid Central Excise documents.
3. Confiscation of goods and tempo.
4. Imposition of penalty under Central Excise Rules.

Issue-wise Detailed Analysis:

1. Allegation of Double Transportation of Excisable Goods:
The department alleged that the appellant factory despatched excisable goods on 22-7-91 under GP1 No. 154/20-7-91, showing a double transaction on 20-7-91 and 22-7-91 under the same GP1. The appellant argued that the goods were initially prepared for transport on 20-7-91, but due to the unavailability of transport, the gate pass was canceled, and a new one was issued on 22-7-91. The department's suspicion was based on hypothetical grounds without independent evidence. The adjudicating authority's conclusion of double transportation lacked substantial evidence, as no goods allegedly removed were traced, and no corroborative oral and documentary evidence was presented.

2. Clearance of Samples Without Valid Central Excise Documents:
The appellant was found transporting six packages of samples without valid Central Excise documents. The appellant admitted this mistake but explained that it was an error by the dealing assistant, not an intentional act of evasion. The samples were later covered under GP1 No. 182, dated 9-8-91. The adjudicating authority's reliance on this error to conclude clandestine removal was deemed unsustainable as the duty involved was minimal (Rs. 272.00), and the omission was satisfactorily explained.

3. Confiscation of Goods and Tempo:
The goods valued at Rs. 1,17,533.50 and the tempo valued at Rs. 3,00,000.00 were seized under Panchanama dated 24-7-91, under the belief that they were liable for confiscation under Central Excise Law. The appellant argued that the goods were duty paid and the seizure was illegal. The tribunal found that the department's case was based on suspicion and procedural errors rather than concrete evidence. The confiscation order was set aside as there was no substantial proof of evasion or clandestine removal.

4. Imposition of Penalty Under Central Excise Rules:
The adjudicating authority imposed a penalty of Rs. 3 lakhs under Rule 173Q on the appellant and a redemption fine of Rs. 1 lakh on the tempo owner. The tribunal found the penalty disproportionate to the gravity of the omission and errors, which were procedural rather than intentional. The penalty was reduced to Rs. 50,000/- considering the facts and circumstances of the case.

Conclusion:
The tribunal allowed the appeal in part, setting aside the confiscation of goods and tempo, and reduced the penalty to Rs. 50,000/-. The decision highlighted the lack of substantial evidence for double transportation and the procedural nature of the errors made by the appellant. The tribunal emphasized that suspicion cannot replace proof and that the department failed to conclusively prove the allegations of clandestine removal.