2007 (6) TMI 479 - AT - Central Excise

Summary

Issues involved: Central Excise duty evasion, penalty imposition, confiscation of goods, personal penalty on partner.

Central Excise Duty Evasion: The appellant, engaged in manufacturing MMF fabric, was found with excess processed fabrics during a visit by Central Excise officers. Shortages of grey MMF and semi-processed MMF were also discovered. The partner admitted to clearing goods without invoices, duty payment, or proper record entry. Traders confirmed receiving processed fabric without duty payment.

Penalty Imposition: The Additional Commissioner confirmed a demand of Rs. 2,61,176/- and imposed penalties under Rule 25(1) and Section 11AC. A personal penalty of Rs. 20,000/- was also levied. The partner faced a separate penalty. On appeal, the penalty on the partner was set aside, but the penalty on the manufacturing unit was upheld.

Confiscation of Goods: The Commissioner confirmed the order confiscating the excess goods but allowed redemption on payment of a fine. The appellant challenged the confiscation, arguing the goods were yet to be entered in the statutory record.

Personal Penalty on Partner: The partner's penalty was set aside on appeal.

Judgment: The Tribunal found no evidence of clandestine removal of the excess fabric. While shortages indicated possible intent to evade duty, the mere presence of goods ready for dispatch did not conclusively prove wrongdoing. The confiscation of seized goods was set aside. The demand of duty was upheld, but the personal penalty under Section 11AC was reduced to Rs. 1 lakh. The separate penalty under Rule 25(1) was set aside, and interest confirmation was upheld. The appeal was disposed of accordingly.