2003 (12) TMI 498 - AT - Central Excise

Issues:
1. Confiscation of goods and imposition of fine and penalty based on non-accountal of goods in RG-1 and PLA.
2. Interpretation of intention to evade duty based on non-making of debit entry in PLA.
3. Justification of confiscation and penalty in the absence of actual duty payment.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Appeal issued by the Commissioner (Appeals), which set aside the adjudication order passed by the Deputy Commissioner. The Deputy Commissioner had ordered the confiscation of goods valued at Rs. 95,686/- and imposed a redemption fine of Rs. 1,00,000/-, with Rs. 7,400/- appropriated from the Bank guarantee. Additionally, a penalty of Rs. 20,000/- was imposed on the respondents.

2. The Commissioner (Appeals) accepted the respondents' explanation that the non-making of a debit entry in the PLA, despite being indicated on the invoices, did not warrant confiscation or penalty. The Commissioner relied on a previous case law to support this interpretation, emphasizing that the absence of a debit entry did not signify an intention to evade duty.

3. In response, the Revenue appealed to set aside the Order-in-Appeal and reinstate the original order. The Revenue argued that the non-accountal of goods in the RG-1 made the goods subject to confiscation, citing precedent cases to support their position. They contended that the failure to account for goods was a significant violation, not a minor breach as argued by the respondents.

4. After hearing both sides, it was noted that the respondents had prepared an invoice and assigned a debit entry in the PLA, suggesting an intention to pay duty, even though the duty was not debited due to the absence of the excise clerk. The Revenue maintained that the removal of goods without debiting duty constituted a major violation, justifying confiscation and penalty.

5. The judgment highlighted that the liberal approach taken by the Commissioner was unjustified in this case. The goods under seizure were not recorded in the production register, and the debit entry on the invoice did not equate to duty payment. Despite the possibility of subsequent duty payment, the failure to record production in RG-1 and debit duty in the PLA was a violation of the Central Excise Rules, warranting confiscation and penalty without proving an intent to evade duty.

6. Consequently, the confiscation of seized goods and the imposition of redemption fine and penalty were deemed justified based on the circumstances. However, considering that the duty involved was only Rs. 15,310/-, the fine and penalty were deemed excessive.

7. As a result, the redemption fine was reduced to Rs. 5,000/- and the penalty to Rs. 2,000/-, modifying the Deputy Commissioner's order accordingly. The Revenue's appeal was partly allowed in the mentioned terms.

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