2009 (9) TMI 789 - AT - Central Excise

Summary

Issues involved: Remand by Hon'ble High Court on appeal filed by Revenue against Tribunal's order, consideration of substantial questions of law regarding non-accountal of goods and raw material, sufficiency of assessee's statement for penalty and confiscation.

Upon remand by the Hon'ble High Court of Gujarat, the Appellate Tribunal CESTAT Ahmedabad reconsidered the matter regarding the imposition of penalty and confiscation in light of the judgments of the Apex Court. The substantial questions of law raised were: (i) Whether the non-accountal of manufactured goods and raw material in statutory registers RG-1 and RG-23 violates specific rules and attracts penalty and confiscation, and (ii) Whether the assessee's statement confessing to the non-maintenance of statutory registers under Section 14 of the Central Excise Act, 1944, is sufficient for the imposition of penalty and confiscation.

The Hon'ble High Court directed the Tribunal to reexamine the imposition of penalty and confiscation in accordance with the Supreme Court's decision on penalty under Section 11AC. The case involved the detection of excess stock of finished goods and raw material during an inspection by Central Excise officers, leading to the question of confiscation of goods rather than short or non-levy of duty. The Tribunal concluded that since the excesses were detected, penalty under Section 11AC was not applicable. The Tribunal considered the Supreme Court's decision in the case of M/s. Dharamendra Textile Processors and determined that no penalty under Section 11AC of the Central Excise Act, 1944 could be imposed on the appellants.