2006 (7) TMI 500 - AT - Customs

Summary

Issues:
- Non-accountal of 255 Nos. of Electronics Trivector Meters
- 228 Nos. of empty carton boxes of meters
- Shortage of 649 cords received on job work basis

Analysis:
1. Non-accountal of 255 Nos. of Electronics Trivector Meters:
The appellants were found to have kept 255 Electronics Trivector Meters ready for dispatch without proper accountal and payment of duty. The Adjudicating authority held that this act contravened Central Excise Rules, making the goods liable for confiscation. However, since the goods were seized but not removed from the Bonded Store Room, confiscation did not occur. The Tribunal found that the duty demand of Rs. 3,39,264/- on these meters was not sustainable due to lack of corroborative evidence of clandestine clearance.

2. 228 Nos. of empty carton boxes of meters:
The Revenue alleged that 228 empty carton boxes, sealed to give the impression of ready dispatch, indicated clandestine clearance of Electronics Trivector Meters without duty payment. The authorized signatory explained that the empty boxes were kept due to production delays. The Tribunal noted the lack of concrete evidence supporting the Revenue's claim of clandestine clearance. Consequently, the duty demand of Rs. 3,39,264/- was set aside, while the penalty of Rs. 15,000/- for account maintenance irregularities was upheld.

3. Shortage of 649 cords received on job work basis:
Regarding the shortage of 649 cords received on job work basis, the appellants accepted the lapse and paid the duty of Rs. 89,120/-. The Commissioner (Appeals) acknowledged that the goods were used in final products and granted Modvat credit of Rs. 35,000/- reversed by the supplier. The penalty under Rule 173Q was reduced from Rs. 4,00,000/- to Rs. 15,000/-. The Tribunal confirmed the duty payment but set aside the penalty under section 11AC due to pre-notice duty payment.

In conclusion, the Tribunal dismissed the duty demand of Rs. 3,39,264/- for lack of evidence, confirmed the duty payment of Rs. 89,120/- for the shortage of cords, and upheld the penalty of Rs. 15,000/- for account maintenance irregularities. The judgment highlighted the importance of proper investigation and evidence in duty demand cases to avoid unfounded allegations of clandestine activities.