2004 (1) TMI 428 - AT - Central Excise

Summary

Issues:
- Appeal against order-in-appeal by Commissioner of Central Excise
- Unaccounted textured yarn and duty evasion
- Imposition and reduction of penalty under Rule 173Q(1)
- Challenge to setting aside of confiscation

Analysis:
The case involves an appeal by the Commissioner of Central Excise against an order-in-appeal passed by the Commissioner (Appeals). During a visit to the respondent's factory, officers discovered unaccounted textured yarn and invoices involving duty evasion. The Commissioner imposed a penalty under Rule 173Q(1), reducing it to Rs. 2,000 and setting aside confiscation. The issue of penalty reduction was challenged, with the Tribunal noting the duty evasion of Rs. 39,149 due to failure in debiting the PLA/RG 23A account. The Tribunal upheld the penalty reduction, emphasizing the duty evasion and the issuance of invoices without debiting duty.

Regarding the setting aside of confiscation, the Tribunal observed that no defense was raised on any collateral accounting indicating production, with the failure occurring only during the final entry in the RG 1 record. The non-recording in the RG 1 record did not signify non-accountal, as the goods were properly packed with valid documentation and accounted for in private records. The Tribunal viewed this as an omission warranting penal action under Rule 226, rather than confiscation. Consequently, the Tribunal found no grounds to interfere with the impugned order, rejecting the Revenue's appeal against the setting aside of confiscation.

In conclusion, the Tribunal upheld the penalty imposition under Rule 173Q(1) while reducing it to Rs. 2,000 due to duty evasion. The Tribunal also dismissed the appeal challenging the setting aside of confiscation, citing the proper documentation and accounting of the goods despite the omission in the RG 1 record.