2004 (3) TMI 653 - AT - Central Excise

Confiscation & penalty - Non-accountal of goods - Demand & Penalty - Shortage of goods alleged

Summary

Issues:
1. Duty demand on unaccounted goods
2. Confiscation of goods without accounting and duty
3. Imposition of penalties on the assessee, Director, and Technical consultant

Analysis:
1. Duty Demand on Unaccounted Goods:
The case involved M/s. Shiel Ice & Chemicals Pvt. Ltd., engaged in the manufacture of Aromatic Chemicals, where a duty demand was made for unaccounted goods between October 1992 to September 1996. The lower authorities confirmed the duty demands along with interest but did not order the confiscation of goods cleared without accounting and duty. The 25 Kgs of Ald-C-14 was confiscated under Rule 226 with an option for redemption on a fine. Penalties were imposed on the assessee, Director, and Technical consultant under Section 11AC and Rule 226.

2. Confiscation of Goods Without Accounting and Duty:
The appellate tribunal found that the appellant's argument regarding the marketability of the seized Ald-C-14 was valid as the product required a maturation period, which was not considered by the lower authority. The tribunal emphasized that goods should only be counted as excisable when in a marketable condition. The evidence presented by the defense, including expert opinions and private production records, indicated that maturation was necessary before the goods were marketable. Therefore, the confiscation of Ald-C-14 and the requirement for distillation quantity to be entered in RG1 were not upheld.

3. Imposition of Penalties:
Regarding the penalties imposed on the assessee, Director, and Technical consultant, the tribunal ordered a partial allowance of the appeal. It directed a remand for re-examination of discrepancies in the Daily Happening Reports and RG1 production entries. The original authority was instructed to determine the duty demand, interest, and any penalties under Section 11AC based on the re-examination. Since no other goods were ordered for confiscation except for Ald-C-14, penalties under Rule 209A on the Director and Chemical Consultant were not upheld.

In conclusion, the appellate tribunal partially allowed the appeal, remanding certain issues for re-examination, and disposed of the appeals accordingly.