2004 (3) TMI 487 - AT - Central Excise

Summary

Issues:
- Appeal against redemption fine and penalty imposed by Commissioner of Central Excise (Appeals)
- Interpretation of Kar Vivad Samadhan Scheme (KVSS) in relation to redemption fine and penalty
- Confiscation of goods not entered in statutory record

Analysis:
1. The appellant filed an appeal against the redemption fine and penalty imposed by the Commissioner of Central Excise (Appeals). The appellant contended that the goods found in the factory, not entered in the statutory record, were assumed by the Revenue Officer to be manufactured by them. The appellant submitted a necessary declaration under the KVSS scheme for dispute settlement, which was accepted by the Revenue authorities. Citing precedents like the case of Kedia Great Galleon Ltd. v. CCE, Indore and Empire Cable Industries v. Commissioner of Central Excise, Delhi-I, the appellant argued that if a matter is settled under the KVSS scheme, redemption fine and penalty cannot be imposed.

2. The Revenue's contention was that the demand of duty and confiscation of goods are distinct. They argued that the declaration under the KVSS scheme was accepted only in relation to the demand of duty, not the confiscation of goods not recorded in the statutory record. The lower authorities justified the confiscation of goods on this basis.

3. The Tribunal analyzed the case and found that the appellant had indeed filed a declaration under the KVSS scheme, which was accepted by the Revenue. The goods were assessed on the assumption that they were manufactured by the appellant and not recorded in the statutory record. The Commissioner (Appeals) acknowledged that some of the seized items could be inputs or bought-out items of the appellant. Referring to precedents, the Tribunal concluded that imposing a redemption fine in lieu of confiscation of goods covered by the KVSS scheme declaration is not sustainable. Therefore, considering the nature of the assessed goods as inputs or bought-out items and the Tribunal's decisions, the imposition of redemption fine and penalty was deemed unsustainable and subsequently set aside, leading to the allowance of the appeal.