2003 (10) TMI 518 - AT - Central Excise

Summary

Issues: Challenge to penalty and redemption fine imposed on M/s. S.R. Industries Ltd.

In this case, M/s. S.R. Industries Ltd. challenged the penalty imposed and redemption fine demanded from them. The appellants argued that they are a 100% Export-Oriented Undertaking and that the Central Excise Officers found goods valued at Rs. 39,32,836/- in excess compared to the recorded goods in the register. The Commissioner confiscated the goods under Sections 111(d) and 111(o) of the Customs Act and imposed a fine of Rs. 8,16,000/- along with penalties under Rule 226 of the Central Excise Rules, 1944, and Section 112 of the Customs Act. The appellants contended that the Customs Act provisions are inapplicable as their goods attract duty under the Central Excise Act, citing a precedent by the Tribunal. They argued that no penalty should be imposed under Section 112 of the Customs Act.

The Respondent, on the other hand, argued that the excess goods were procured without duty payment, leading to a violation of notification conditions, making the goods liable for confiscation under Sections 111(d) and 111(o) and the appellants liable for penalties under Section 112 of the Customs Act. The Respondent also contended that citing the wrong rule does not affect the Commissioner's power to impose penalties, citing a Tribunal case.

After considering both sides' arguments, the Tribunal found that the unaccounted goods in the factory premises made them liable for confiscation and penalties. While upholding the penalty under Rule 226 of the Central Excise Rules, 1944, the Tribunal reduced the penalty amount to Rs. one lakh and the redemption fine to Rs. one lakh, considering the circumstances of the case. The appeal was disposed of with this decision.