2006 (12) TMI 299 - AT - Central Excise

Summary

Issues:
1. Confiscation of excess physical stocks found in factory premises.
2. Imposition of Redemption Fine (RF) on confiscated goods.
3. Penalty for contravention of not accounting excisable goods.
4. Applicability of Rule 173Q and Section 34 of the Central Excise Act.

Analysis:

Issue 1: Confiscation of excess physical stocks found in factory premises
The Revenue challenged the Commissioner (Appeals) order which upheld the findings of the Original authority regarding excess physical stocks found in the factory. The original authority had imposed a penalty but did not confirm the confiscation of goods found in excess in the factory and Calcutta premises. The Revenue contended that the excess stock found in the factory should have been confiscated and not given any relief. The Tribunal held that as per Rule 173Q, unaccounted goods are liable for confiscation, and the excess stock of 3423 cartons worth Rs. 4,56,705/- found in the factory should have been confiscated. The Commissioner (Appeals) decision was deemed unsustainable, and the confiscation was upheld with a Redemption fine imposed.

Issue 2: Imposition of Redemption Fine (RF) on confiscated goods
The Tribunal considered the provisions of Rule 173Q and Section 34 of the Central Excise Act regarding the imposition of Redemption Fine (RF) on confiscated goods. It was noted that goods liable for confiscation can be redeemed by paying a fine in lieu of confiscation. The Tribunal found that the excess stocks in the factory were required to be confiscated, and thus, a Redemption fine of Rs. 40,000/- was imposed, which was less than 10% of the value of the goods, following the Tribunal's practice.

Issue 3: Penalty for contravention of not accounting excisable goods
The learned JDR pointed out that the appellants had a history of clandestinely removing goods without payment of duty. Relying on previous rulings, it was argued that in similar circumstances, confiscation of unaccounted goods had been upheld, and penalties imposed. The Tribunal considered the past offenses of the appellants and imposed a Redemption fine without granting any concession due to their consistent practice of non-compliance.

Issue 4: Applicability of Rule 173Q and Section 34 of the Central Excise Act
The Tribunal analyzed the applicability of Rule 173Q and Section 34 of the Central Excise Act in determining the confiscation and imposition of Redemption Fine. It was concluded that the provisions clearly stipulated the liability for confiscation of unaccounted goods and the imposition of penalties. The Tribunal referred to relevant case laws to support its decision and distinguished them from the case at hand, ultimately allowing the appeal and fixing the Redemption fine at Rs. 40,000/-.

This detailed analysis of the judgment highlights the legal intricacies involved in the case and the Tribunal's reasoning behind the decisions rendered on each issue raised by the parties.