2002 (3) TMI 729 - AT - Central Excise

Issues:
1. Correctness of the order appropriating security and imposing penalty under Rule 173Q(1)(d) of the Central Excise Rules, 1944.
2. Violation of Rule 173G(4) and Rule 226 of Central Excise Rules, 1944.
3. Confiscation of goods under Rule 210 and 226 of Central Excise Rules, 1944.
4. Non-mentioning of Rule 51A in the show cause notice.
5. Violation of Rule 51A concerning retention of duty-paid goods without documentation.
6. Justification of the order of confiscation and penalty imposition.

Analysis:

1. The appellants contested the correctness of the order appropriating the security of Rs. 1 lakh executed by way of Bank Guarantee and imposing a penalty of Rs. 1 lakh under Rule 173Q(1)(d) of the Central Excise Rules, 1944. The Commissioner upheld the confiscation order for contravention of Rule 123G(4) and Rule 51A of the Central Excise Rules, noting the violation of rules by the appellants in receiving and storing materials without permission or proper documentation, leading to the penalty and confiscation.

2. The violation of Rule 173G(4) and Rule 226 of Central Excise Rules, 1944 was established based on the appellants' admission of receiving and storing 4000 M.Ts. of steel scrap without proper entry in the records. The Commissioner found a blatant violation of Rule 51A and Rule 173Q, justifying the penalty and confiscation of goods valued at Rs. 2 crores.

3. The order for the confiscation of goods under Rule 210 and 226 of Central Excise Rules, 1944 was justified by the Commissioner due to the unaccounted storage of imported goods without proper documentation or permission, leading to a clear violation of the Central Excise Rules. The Commissioner maintained the penalty and confiscation order based on the established violations.

4. The non-mentioning of Rule 51A in the show cause notice was contested by the appellants' counsel, arguing that the absence of explicit reference to the rule should invalidate the proceedings. However, the Commissioner proceeded based on the facts presented, justifying the confiscation and penalty orders.

5. The violation of Rule 51A concerning the retention of duty-paid goods without documentation was a key point of contention. The appellants argued against the application of Rule 51A, while the Department emphasized the violation and the unaccounted storage of goods without proper authorization, leading to the confiscation and penalty imposition.

6. The justification for the order of confiscation and penalty imposition centered on the clear violation of Central Excise Rules by the appellants in storing imported goods without proper documentation or permission. The Commissioner deemed the violations as non-technical, justifying the confiscation and penalty, rejecting the appeal based on the established facts and admissions of the offense.

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