2009 (6) TMI 786 - AT - Central Excise

Summary

Issues:
Penalty under Rule 25 of the Central Excise Rules, 2002 on the company and its Director, Manager, and Excise Clerk.

Analysis:
The judgment dealt with penalties imposed on a company and its officials under Rule 25 of the Central Excise Rules, 2002. The main charge against the company was the non-accounting of excisable goods for a few days, detected during a visit by Department officers. The original authority upheld this charge, ordering confiscation of goods and imposing penalties. The appellate authority reduced the fines and penalties imposed. The company argued that there was no legal requirement to maintain statutory records of production, claiming they maintained private records in a computerized manner. The company requested a waiver of pre-deposit and stay of recovery, citing financial hardships. On the other hand, the Department contended deliberate non-accounting of production, including clandestine clearance of goods. The tribunal found Rule 25 applicable without requiring mens rea for confiscation. The balance-sheet presented by the company was deemed insufficient to prove financial status. The tribunal directed the company to make an additional deposit under Section 35F of the Central Excise Act, with a compliance deadline. Compliance would result in a waiver of pre-deposit and stay of recovery for the penalties imposed on the company's officials.

This judgment analyzed the applicability of Rule 25 of the Central Excise Rules, 2002 concerning penalties on the company and its officials. The tribunal found the rule applicable based on the evidence presented, without requiring mens rea for confiscation. The company's argument regarding the maintenance of private records in a computerized manner was noted, but the tribunal found it insufficient to rebut the allegation of non-accounting of excisable goods. The tribunal emphasized the need for additional pre-deposit by the company under Section 35F of the Central Excise Act, separate from the earlier deposit made. Compliance with the directed deposit would lead to a waiver of pre-deposit and stay of recovery for the penalties imposed on the company's officials, considering the circumstances of the case and the evidence presented.