2010 (1) TMI 1011 - AT - Central Excise

Summary

Issues:
1. Confiscation of unaccounted stock of steel ingots
2. Penalty imposition on the Respondent

Analysis:

Issue 1: Confiscation of unaccounted stock of steel ingots
The dispute revolves around the confiscation of 15.56 MTs of steel ingots not recorded in the RG-1 register. The Assistant Commissioner ordered the confiscation under Rule 25(1) of the Central Excise Rules, 2002. The Commissioner (Appeals) set aside the confiscation, leading to the Revenue's appeal. The Department argued that confiscation is warranted as the goods were not accounted for, irrespective of intent. The Respondent contended that the steel ingots were meant for recycling and not for clandestine clearance. The Tribunal analyzed the provisions of Rule 25 and noted that confiscation and penalty apply for non-accounted excisable goods, without requiring proof of intent to evade duty. Citing precedents, the Tribunal upheld the confiscation, emphasizing the contravention of Rule 10 regarding maintaining production accounts. The Tribunal differentiated this case from previous judgments, reinstating the Assistant Commissioner's order on confiscation.

Issue 2: Penalty imposition on the Respondent
The penalty of Rs. 1,43,051/- was imposed on the Respondent concerning the duty demand for shortage of Ingot Moulds. The Assistant Commissioner inferred clandestine removal due to non-accounting, supported by the Respondent's payment of the duty. However, the Tribunal found no evidence of clandestine clearance or intent to evade duty. The Tribunal highlighted that penalty under Section 11AC requires wilful misstatement, suppression, fraud, or contravention to evade duty, none of which were proven by the Department. Therefore, the Commissioner (Appeals) correctly set aside the penalty, as the Respondent's voluntary duty payment did not imply clandestine clearance. The Tribunal upheld the Commissioner (Appeals) decision on penalty imposition.

In conclusion, the Tribunal partially allowed the Revenue's appeal by reinstating the confiscation of steel ingots and upheld the setting aside of the penalty imposed on the Respondent. The Cross-Objection of the Respondent was disposed of accordingly.