2007 (4) TMI 512 - AT - Central Excise

Summary

Issues: Redemption fine and penalty imposed on the appellant.

Redemption Fine:
The appellant appealed against a redemption fine of Rs. 15,000 and a penalty of Rs. 19,000 imposed on them. The appellant, engaged in manufacturing engine parts classified under Chapter 85 of the Central Excise Act, 1985, was exempted from duty under Notification No. 8/2002. Central excise officers found finished goods outside the factory premises without proper documentation. The adjudicating authority dropped the proceedings, but the department appealed to the Commissioner (Appeals) who confiscated the goods and imposed the redemption fine and penalty. The Tribunal found that the clearance values of the appellant were within the exemption limit, and no duty could be demanded on the seized goods. Consequently, the Tribunal set aside the redemption fine as there was no justification for its imposition.

Penalty Imposition:
The Tribunal noted that the appellant had cleared goods without proper documentation, violating Central Excise Rules. While no duty was demandable on the seized goods, the penalty for violating the rules was considered justified. Therefore, the Tribunal upheld the imposition of the penalty of Rs. 19,000. The appeal was disposed of accordingly, with the redemption fine set aside and the penalty upheld. The judgment clarified that the imposition of the penalty was justified due to the violation of Central Excise Rules, even though no duty was payable on the seized goods. The Tribunal's decision highlighted the importance of compliance with documentation requirements under the Central Excise Rules, emphasizing the penalty as a consequence of non-compliance despite the exemption from duty on the goods.