2005 (12) TMI 398 - AT - Central Excise

Summary

Issues:
1. Duty evasion and confiscation of goods.
2. Validity of retraction of statement.
3. Imposition of fines and penalties.
4. Confiscation of the vehicle.

Analysis:

Issue 1: Duty evasion and confiscation of goods
The case involved the interception of a lorry carrying goods without proper duty documentation. The goods were suspected to be clandestinely removed from the factory. The original authority issued a show cause notice for confiscation, duty demand, and penalties. The company claimed the goods were part of their trading activity. The first appellate authority confirmed the duty demand but reduced the redemption fine. The Commissioner imposed a fresh penalty under Rule 173Q. The appellate tribunal found the goods were clandestinely removed and upheld the duty demand. The fine was reduced from Rs. 14,000 to Rs. 10,000, and the penalty under Rule 173Q of Rs. 3,000 was vacated.

Issue 2: Validity of retraction of statement
The tribunal determined that the retraction of the company's director's inculpatory statement was not valid as there was no explanation for the delay in retraction. The lower authorities were justified in relying on the director's statement to conclude that goods were clandestinely removed. The demand for duty was upheld, and the fine was reduced to Rs. 10,000. The penalty under Rule 173Q was deemed inappropriate and vacated.

Issue 3: Imposition of fines and penalties
The tribunal reviewed the quantum of fines and penalties imposed. It found the fine of Rs. 10,000 to be on the higher side and reduced it from Rs. 14,000. The penalty of Rs. 3,000 under Rule 173Q was vacated as it was not imposed by the original authority and was not raised by the Department. The tribunal provided relief to the appellant by adjusting the fines and penalties accordingly.

Issue 4: Confiscation of the vehicle
The question of confiscation of the vehicle was linked to the confiscation of goods. The tribunal noted a procedural error where the appeals of the company and another party were not disposed of in the correct sequence. The tribunal set aside the order related to the confiscation of the vehicle and directed the Commissioner to reexamine the appeal process, ensuring a fair hearing for all parties involved.

This comprehensive analysis addresses the key issues raised in the legal judgment, detailing the tribunal's findings and decisions on duty evasion, retraction of statements, fines, penalties, and confiscation of goods and vehicles.