2001 (11) TMI 777 - AT - Central Excise

Clandestine removal - Proof - Double sets of accounts - Confiscation - Accountal of goods - Penalty

Summary

Issues:
1. Duty confirmation and penalty imposition under Rule 9(2) of Central Excise Rules, 1944 read with Section 11A(1) of Central Excise Act, 1944 for clandestine removal of final product based on double sets of production slips.
2. Confiscation of waste and scrap not recorded in RG 1 register under Rule 173Q and imposition of personal penalty.
3. Reduction of duty demand and personal penalty.
4. Confiscation of unrecorded waste and scrap under Rule 173Q and imposition of penalty under Rule 226.

Analysis:
1. The Commissioner confirmed duty of Rs. 27,478 against the appellant under Rule 9(2) of Central Excise Rules, 1944 for clandestine removal based on double sets of production slips found during a visit. The appellant failed to provide sufficient reasons for maintaining two sets of slips, leading to duty confirmation and penalty imposition. The appellant's submission of inadvertent mistake was dismissed, upholding the duty demand but reducing the personal penalty.

2. Waste and scrap valued at Rs. 34,000 not recorded in RG 1 register were confiscated with an option for redemption on payment of a fine. A personal penalty of Rs. 5,000 was also imposed under Rule 173Q. The Tribunal noted the industry practice of entering waste in RG 1 only when sold but referred to a precedent where non-entered goods can only be confiscated under Rule 226, not Rule 173Q. Following this, the confiscation was set aside, and the penalty reduced to Rs. 2,000 due to improper record maintenance.

3. The Tribunal upheld the duty demand of Rs. 27,478 but reduced the personal penalty to Rs. 15,000 considering the circumstances of the case and the appellant's involvement in clandestine activities.

4. Regarding the penalty imposed under Rule 226 for improper record-keeping, the Tribunal reduced it to Rs. 2,000 from Rs. 5,000 due to the appellant's failure to maintain records properly. The judgment disposed of the appeal based on the above considerations and reductions in penalties.