1996 (2) TMI 466 - AT - Central Excise

Summary

Issues: Denial of de novo adjudication, enhancement of redemption fine and penalty.

Analysis:
The appellants challenged the order of the Collector, Central Excise, which denied de novo adjudication and increased the redemption fine from Rs. 5,000 to Rs. 50,000, and the penalty from Rs. 10,000 to Rs. 25,000. The case involved the seizure of excess marble tiles by Central Excise Authorities from the factory premises of the appellants. The Collector allowed redemption of the goods on payment of a fine and imposed a penalty. Upon appeal to the Tribunal, the case was remanded for a speaking order. However, on de novo adjudication, the Collector raised the fines and penalties significantly, prompting the appeal before the Tribunal.

The consultant for the appellants argued that the seized marble tiles were not fully manufactured and had not reached the stage of entry in the RG-1 register. He contended that the seizure was unjustified and that the enhanced fines were disproportionate. The consultant highlighted that on a previous occasion, the Tribunal had sent the case for de novo adjudication, suggesting bias on the part of the Collector in increasing the fines without proper notice to the appellants.

On the other hand, the SDR submitted that even if the goods were in a semi-finished state, they should have been entered in the RG-1 register as it allows for semi-finished goods. The SDR acknowledged that the enhancement of fines may not have been necessary.

After hearing both sides, the Judge found a dispute regarding the stage of the goods but agreed with the SDR that a breach in account maintenance occurred as the goods were not entered in the appropriate column of the RG-1 register. Consequently, a penalty was deemed appropriate. However, the Judge considered the initial penalty imposed by the Collector to be reasonable and reduced the penalty from Rs. 25,000 to Rs. 10,000. Similarly, the redemption fine was reduced from Rs. 50,000 to Rs. 5,000, considering the initial amount to be reasonable. The Judge upheld the impugned order with modifications, disposing of the appeal accordingly.