2003 (10) TMI 423 - AT - Central Excise

Summary

Issues: Appeal against modification of order-in-original regarding confiscation of unaccounted goods, redemption fine, and penalty.

The appeal was filed by the Revenue against the order-in-appeal where the Commissioner modified the order-in-original by setting aside the confiscation of seized unaccounted goods and the redemption fine imposed. Despite the absence of the respondents during the hearing, the appeal was decided on merits after hearing the learned SDR. The record revealed that 5,803 MT of HBB of Wire were non-accounted for, and the respondents claimed the goods were still in the factory without any attempt at clandestine removal. The adjudicating authority had ordered confiscation, redemption fine, and a personal penalty of Rs. 10,000. The Commissioner (Appeals) referred to precedents like the case of Bhillai Conductors (P) Ltd. and Nestle India Ltd., stating that in the absence of mens rea, Rule 173Q could not be invoked for non-accountal of goods, thus setting aside the confiscation and redemption fine, and reducing the penalty to Rs. 5,000.

However, the impugned order was deemed unsustainable as the Commissioner (Appeals) failed to consider the judgment of the Bombay High Court in the case of Kirloskar Brothers v. UOI, where it was held that Rule 173Q(1)(b) could be invoked even without mens rea for clandestine removal of goods. The Tribunal held that the High Court's judgment takes precedence over the Tribunal's decision, thus setting aside the Commissioner's order and restoring that of the adjudicating authority. Consequently, the Revenue's appeal was accepted.