2003 (5) TMI 333 - AT - Central Excise

Summary

Issues involved:
1. Confiscation of goods and imposition of penalties for discrepancies found during inspection.
2. Confiscation of unaccounted goods and imposition of penalties for non-compliance with Central Excise Rules.
3. Confiscation of goods sent for repair without following proper procedures.
4. Confiscation of unaccounted scrap and penalties for failure to maintain proper records.
5. Demand based on goods sent for testing without payment of duty.
6. Demand for goods sent for job work not received back within the prescribed period and imposition of penalties.

Analysis:
1. The appeal was filed against the order-in-appeal passed by the Commissioner (Appeals) after discrepancies were found in the statutory records during a factory visit. Confiscation of goods, including pumps, hydraulic lift assembly, and aluminum scrap, was ordered with penalties imposed under various sections of the Central Excise Act, 1944 and Central Excise Rules. The appellant contended that the confiscated duty-paid goods were cleared for repair and should not have been confiscated.

2. The Revenue argued that the goods were received for repair without proper authorization or submission of required intimation, leading to the upheld confiscation. The appellant's failure to follow the procedures under Central Excise Rules for receiving duty-paid goods for repair was highlighted as the reason for the confiscation.

3. Regarding the unaccounted scrap sent for conversion into slabs, the appellants admitted the lack of entry in statutory records. As the scrap arose from the manufacturing process, the appellant was held liable to maintain records, leading to the upheld confiscation.

4. The demand based on slips recovered from the premises, indicating goods sent for testing without duty payment, was contested by the appellant. However, the inability to provide a satisfactory explanation for the testing process and the admission of goods removal without duty payment led to the upheld demand.

5. The demand for goods sent for job work but not received back within the prescribed period was challenged by the appellants, claiming entitlement to Modvat credit. However, as the goods were received after the stipulated time frame, the demand for reversal of credit was upheld.

6. The penalty imposed on the appellants was reduced from the original amount to Rs. 40,000 based on the Tribunal's discretion to impose a lesser penalty under Section 11AC of the Central Excise Act, 1944. The penalty reduction was granted considering the facts and circumstances of the case, leading to the disposal of the appeal with the modified penalty amount.