2003 (9) TMI 622 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal confirming redemption fine and penalty
- Confiscation of unaccounted processed cotton fabrics and grey cotton fabrics
- Arguments regarding non-accountal of finished goods and absence of mens rea
- Applicability of Rule 173Q of Central Excise Rules
- Decision on redemption fine and penalty amounts

Analysis:
The appeal was filed against Order-in-Appeal confirming redemption fine and penalty imposed on M/s. Delhi Dyeing Mills for unaccounted processed cotton fabrics and grey cotton fabrics. The appellant argued that the seized fabrics were not fully processed and were not entered in the statutory records, emphasizing that non-accountal of finished goods does not automatically lead to confiscation. They also contended that the redemption fine and penalty amounts were excessive compared to the duty involved.

In response, the Departmental Representative cited the statement of the partner admitting the unaccounted fabrics and non-maintenance of records, asserting that the goods were liable for confiscation under Rule 173Q of the Central Excise Rules. The representative relied on previous tribunal decisions and a Bombay High Court ruling stating that mens rea is not essential for imposing penalties under the rule.

Upon review, the Tribunal noted that the appellant did not challenge the Panchnama or provide evidence to refute the partner's statement. The Tribunal found no merit in the argument that the fabrics were not fully processed or that lot-wise registers were maintained. Rule 173Q was invoked, allowing for confiscation and penalties for unaccounted goods, with the absence of mens rea not affecting the confiscation. The Tribunal referenced a Supreme Court ruling to support this interpretation.

Ultimately, the Tribunal upheld the confiscation of goods, along with the redemption fine and penalty. However, considering the circumstances and duty involved, the Tribunal agreed to reduce the penalty to Rs. 5,000 and the redemption fine to Rs. 10,000, deeming the initial amounts excessive. This decision aimed to balance justice with the penalty amounts imposed.