2005 (11) TMI 394 - AT - Central Excise

Summary

Issues: Imposition of penalty and redemption fine on excess goods found during Central Excise Officers' visits.

Analysis:
1. The case involved the imposition of a penalty and redemption fine on goods found in excess during visits by Central Excise Officers. The appellant's factory was visited, and excess plywood and veneer were discovered, leading to a Show Cause Notice for confiscation and penalties.

2. The officers seized the goods, and after adjudication, the goods were confiscated with a redemption fine of Rs. 2.00 Lakhs and a penalty of Rs. 50,000. On appeal, the Commissioner reduced the penalty to Rs. 25,000. The appellant argued that the seized goods were in-process and had not reached the RG-I stage, denying any mens rea for not accounting the goods.

3. The appellant contended that the goods were not ready for dispatch as they were in-process and had not reached the required stage. The Revenue argued that the goods were ready for dispatch as they were stamped and found outside the bonded store room, indicating a risk of clandestine removal.

4. The Tribunal observed that the Show Cause Notice lacked allegations of intent to remove goods clandestinely. It noted the appellant's immediate communication regarding the goods' in-process status and the absence of contrary evidence. Referring to precedent, the Tribunal held that mere non-accounting of goods does not imply intent for clandestine removal, requiring mens rea for penalties and confiscation.

5. Consequently, the Tribunal set aside the confiscation, redemption fine, and penalty imposed on the appellant. However, it found a violation of Central Excise Law due to the appellant's failure to record in-process goods. Therefore, a penalty of Rs. 5,000 was imposed under Rule 27 of the Central Excise Rules, 2002, to be paid immediately. The appeal was partially allowed based on the modifications mentioned.