2004 (11) TMI 514 - AT - Central Excise

Summary

Issues:
Challenge to penalty and redemption fine imposed on M/s. Kakkar Complex Steels (P) Ltd.

Analysis:
The Appellant, represented by Shri Gautam Kakkar, Director, challenged the penalty and redemption fine imposed on them. The Central Excise Officers found discrepancies in the stock of steel ingots at the factory, leading to the confiscation of ingots and imposition of a redemption fine and penalty. The Appellant argued that the discrepancy was due to the unrecorded production on specific days when the Administrative Office was closed. They cited a Tribunal decision stating that penalties should not be imposed without evidence of deliberate defiance of law or dishonest conduct.

The Respondent, represented by Shri V. Valte, SDR, contended that the penalties imposed were justified as there was a clear contravention of Central Excise Rules due to the excess physical stock compared to the RG-1 register.

Upon considering the arguments, the Judge, Shri V.K. Agrawal, noted that the Accounts Manager of the Appellant immediately explained that the excess stock was due to unrecorded production on the closed office days. Drawing parallels with a similar case, the Judge found no deliberate defiance of law by the Appellants. Consequently, the Judge set aside the impugned order, ruling in favor of the Appellant and allowing the appeal.

In conclusion, the judgment by the Appellate Tribunal CESTAT, New Delhi, underlines the importance of establishing deliberate defiance of law or dishonest conduct before imposing penalties. The decision in this case was based on the specific circumstances where the discrepancy in stock was explained by unrecorded production on days when the office was closed, leading to the setting aside of the penalties and redemption fine imposed on M/s. Kakkar Complex Steels (P) Ltd.