2003 (11) TMI 405 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods and penalty under Rule 173Q and Rule 226 for not entering final heaters in RG 1 register.
2. Appeal against the order of Deputy Commissioner confirming liability to confiscation and imposing penalties.
3. Commissioner (Appeals) decision setting aside confiscation and penalty.
4. Assessment of intent to evade duty and contravention being venial and technical.
5. Reduction of fine and penalty by the Tribunal.

Analysis:
1. The officers found final heaters not entered in the RG 1 register at the factory of the respondent. A notice was issued proposing confiscation of goods under Rule 173Q and penalty. The Deputy Commissioner confirmed the liability to confiscation, redeemable on payment of Rs. 1,20,000, and imposed a penalty of Rs. 60,000 under Rule 173Q.

2. The respondent appealed, and the Commissioner (Appeals) accepted that there was no intent to clear goods without duty payment, setting aside confiscation and penalty. The department appealed against this decision.

3. The Tribunal heard both sides and assessed the situation. The Counsel for the respondent argued that the goods were omitted due to the plant excise clerk's illness. However, the Tribunal found this explanation unconvincing based on the statement of Maheshbhai Shastri, indicating the goods were manufactured the previous week.

4. The Tribunal noted that while the goods were liable for confiscation under Rule 226 for not being entered in the RG 1 register, there was no evidence of intent to evade duty. Considering the circumstances, the Tribunal reduced the fine from Rs. 1,20,000 to Rs. 25,000 and the penalty to Rs. 2,000, showing leniency due to the lack of intent to evade duty.

5. Ultimately, the Tribunal dismissed the appeal while reducing the fine and penalty, emphasizing the importance of intent in cases of contravention and the need for proportionate penalties within the limits prescribed by the rules.