2003 (3) TMI 617 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit and stay of recovery of penalty amounting to Rs. 1 lakh due to non-accountal of excisable goods in RG 1 register.

Analysis:
The case involved a dispute regarding the imposition of a penalty of Rs. 1 lakh on the appellants for the non-accountal of 203 bags of sugar in the RG 1 register, discovered during a visit by Central Excise officers. The Department proposed confiscation of the goods and imposition of penalties. The original authority ordered confiscation with a fine of Rs. 1 lakh and a personal penalty of Rs. 2 lakhs. The Commissioner (Appeals) upheld the decision but reduced the fine and penalty to Rs. 50,000 and Rs. 1 lakh respectively. The appellants argued that mens rea was necessary for penalty imposition under Rule 173Q(1)(d), which was not proven in their case. They also challenged the confiscation order. The Tribunal noted conflicting decisions but emphasized that the High Court decision favored the Revenue. However, it found that the penalty quantum was not properly determined by the lower authorities. The discretion provided under Rule 173Q ranged from Rs. 5,000 to three times the value of the goods, indicating the need for a case-specific assessment. The absence of mens rea and the circumstances of the case were not adequately considered by the authorities. Therefore, the Tribunal granted a waiver of pre-deposit and stay of recovery for the penalty exceeding Rs. 25,000, requiring a deposit of Rs. 25,000 within six weeks.

In conclusion, the Tribunal granted relief to the appellants by waiving the pre-deposit and stay of recovery for the penalty exceeding Rs. 25,000 due to insufficient consideration of the penalty quantum by the lower authorities. The case highlighted the importance of assessing penalties based on the specific circumstances and presence of mens rea, as required by the relevant legal provisions.