2004 (2) TMI 510 - AT - Central Excise

Summary

Issues:
Confiscation of metal rolling mill rolls for non-entry in RG-1 register, imposition of redemption fine and penalty under Rule 25 of Central Excise Rules, 2001.

Analysis:
The case involved the confiscation of 18 metal rolling mill rolls due to non-entry in the RG-1 register by the appellant. The Commissioner of Central Excise, Jamshedpur imposed a redemption fine of Rs. 5,00,000 and a penalty of Rs. 1,00,000 under Rule 25 of the Central Excise Rules, 2001. The appellant's factory was visited by Central Excise officers who found the rolls packed in wooden cases without proper entry in the records. The appellant explained that the rolls were part of an export order, with some already dispatched, and the remaining rolls were not exported due to the buyers not opening a Letter of Credit. The rolls were kept in wooden boxes to prevent damage, and minor processes were required before export.

The appellant was issued a show cause notice proposing confiscation and penalty. In their defense, they provided evidence of the export order, correspondence with the purchaser, and the subsequent export of the seized rolls. They argued that the rolls were tailor-made for specific customers and could not be cleared for home consumption without duty payment. The appellant submitted operation charts showing minor operations carried out before export, along with necessary export documents.

The Commissioner did not accept the appellant's contentions and passed the impugned order, leading to the appeal. During the hearing, it was established that the rolls were eventually cleared for export. The Commissioner's reasoning was based on assumptions regarding the rolls' specifications and potential resale options. The appellant's argument that the rolls were part of an export consignment and required minor operations before export was supported by evidence.

The appellate tribunal found that the rolls were indeed part of an export consignment and were not fully finished for entry in the RG-1 register. The non-entry was not with any mala fide intention to evade duty. As a result, the impugned order was set aside, and the appeal was allowed in favor of the appellant, granting them consequential relief.