2002 (4) TMI 673 - AT - Central Excise

Summary

Issues:
1. Confiscation of 1250 boxes of Charminar quimon.
2. Consideration of penalty and redemption fine.
3. Challenge to the confiscation of 450 boxes.

Analysis:

The appeal before the Appellate Tribunal CEGAT, Bangalore concerned the confiscation of 1250 boxes of Charminar quimon under Chapter 94 of the Central Excise Tariff Act, 1985. The matter originated from an Order-in-Appeal passed by the Commissioner of Customs and Central Excise (Appeals), Hyderabad. The Deputy Commissioner initially adjudicated the case, concluding that 800 boxes of 10 grams pack, 430 boxes of 25 grams pack, and 20 boxes of 50 grams pack were not liable for confiscation but imposed a penalty of Rs. 35,000. Subsequently, the Commissioner (Appeals) set aside the Deputy Commissioner's order and ordered the confiscation of all 1250 boxes.

Regarding the challenge to the confiscation of 450 boxes, the appellant argued that these boxes were available in the factory and not cleared without payment of duty. The appellant contended that at most, these boxes could attract a penalty for improper accounting, as the serial numbers on them were irregularly marked and not entered in the RG 1 register. On the other hand, the Respondent justified the order for confiscation of all 1250 boxes, emphasizing that the party should also pay a redemption fine in addition to confiscation. The Respondent argued that since the party did not appeal the penalty amount, there was no need for reconsideration.

After careful consideration, the Tribunal found merit in the appellant's argument regarding the 450 boxes not being liable for confiscation as they were present in the factory. The Tribunal noted that the Deputy Commissioner had imposed a penalty of Rs. 35,000 linked with the confiscation, which the Commissioner (Appeals) reversed. As a result, the Tribunal set aside the order for confiscation of the 450 boxes and directed the adjudicating authority to reassess the redemption fine and penalty, providing the party with an opportunity to present their case. The Tribunal clarified that since the penalty was connected to the confiscation proceedings and the 450 boxes were not liable for confiscation, the quantum of redemption fine and penalty needed to be determined separately.

In conclusion, the Tribunal modified the order by setting aside the confiscation of the 450 boxes and instructed the adjudicating authority to reevaluate the redemption fine and penalty, ensuring a fair opportunity for the party to present their case. The appeal was disposed of accordingly.