2004 (3) TMI 514 - AT - Central Excise

Summary

Issues:
1. Confiscation of seized goods for non-accountal in the RG-I register.
2. Imposition of personal penalties on the Managing Director and Director of the Company.

Confiscation of Seized Goods:
The case involved a show cause notice proposing confiscation of seized goods found in excess during a physical verification at the appellant-company's factory. The goods were not accounted for in the RG-I register as they were to be tested for defects before being entered. The appellant argued that the goods were defective and not marketable, following a practice where goods were only entered in the register after testing. The appellants contended that this practice was known to Central Excise Officers, and there was no evidence of intent for clandestine removal to evade duty. Citing a previous case, it was highlighted that goods are not liable for confiscation if not accounted for in the register without evidence of clandestine intent. The Tribunal found that the confiscation and penalties were not justified as there was no evidence of evasion, and the appeal was allowed with relief to the appellants.

Imposition of Personal Penalties:
The show cause notice also proposed personal penalties on the Managing Director and Director of the Company under Central Excise Rules. The appellants argued that the penalties were not proper as they had not contravened any rules, emphasizing that the goods were not marketable and were meant for specific customers who rejected non-conforming goods. The Tribunal noted the appellants' consistent practice of entering goods in the register only after testing for defects, which was known to Central Excise Officers. The Tribunal found no evidence of clandestine removal or intent to evade duty, leading to the decision that the personal penalties imposed were not justified. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Kolkata highlights the issues of confiscation of seized goods and imposition of personal penalties, providing a comprehensive overview of the case and the Tribunal's decision.