2006 (1) TMI 430 - AT - Central Excise

Evidences - Panchanama - Penalty - Non-invoking of specific penal clause - Confiscation and penalty - Appeal - New plea at Tribunal stage

Summary

Issues:
1. Non-accountal of finished goods
2. Confiscation and penalty under Rule 173Q
3. Export nature of goods
4. Specific clause under Rule 173Q
5. Confiscation requirement in the circumstances

Analysis:
1. Non-accountal of finished goods:
The Commissioner (Appeals) rejected the appellant's plea that the seized goods were unfinished, stating lack of evidence. The appellant's defense of non-accountal in the stock register due to an employee's absence was dismissed as routine and unsupported. The Tribunal upheld the confiscation of goods, citing rules mandating daily maintenance of stock registers and previous judgments. The appellant's argument that the goods were manufactured from accounted raw material was considered but deemed insufficient.

2. Confiscation and penalty under Rule 173Q:
The Tribunal affirmed that unaccounted goods are liable for confiscation under Rule 173Q, irrespective of mens rea. Previous judgments were cited to support the confiscation and penalty imposition without evidence of intent to evade duty. The Tribunal reduced the penalty imposed on the appellant to Rs. 5,000, considering the circumstances.

3. Export nature of goods:
The appellant claimed that the seized goods were meant for export, but this argument was not raised before lower authorities. The Tribunal held that even if the goods were intended for export, the proven non-accountal rendered this argument irrelevant.

4. Specific clause under Rule 173Q:
The appellant contended that the Department should specify the exact sub-clause of Rule 173Q invoked before imposing penalties. The Tribunal found the show cause notice sufficiently detailed, negating any disadvantage to the appellants due to the lack of specific clause mention.

5. Confiscation requirement in the circumstances:
There was a divergence of views on whether confiscation was necessary in this case. The Tribunal relied on previous High Court judgments supporting confiscation and penalty in similar situations. The Tribunal upheld the confiscation of goods but reduced the penalty imposed on the appellant to Rs. 5,000 for the sake of justice.