2007 (6) TMI 12 - AT - Central Excise

Confiscation and Penalty Alleged that de-sealing of the stenter machine, on their own without intimation of the revenue and processing the goods by using the said stenter and not entering the same in the RG-1 register and penalty and redemption imposed on the partnership unit

Summary

Issues:
1. Non-entry of goods in RG-1 record leading to confiscation and penalties.

Analysis:
The central excise officers conducted a preventive check at the appellant's premises and found discrepancies in the records. The closing balance in RG-1 did not match the physical stock, and a stenter machine sealed with a Central Excise Bottle Seal was found to be in operation without proper intimation to the department. Additionally, excess processed fabrics were discovered, which the appellant intended to remove without paying central excise duty. A statement by the partner of the appellant admitted the offense under Central Excise Law.

The proceedings resulted in the confiscation of the excess goods with an option for redemption on a fine, along with imposing personal penalties on the appellant and the partner. The appellant contended that the goods were still on the premises and the non-entry in the RG-1 record was a procedural lapse, not warranting confiscation. However, the Tribunal found that the appellant's actions, including operating the sealed machine and not recording the processed fabrics, indicated an intention to evade duty. The circumstantial evidence supported the Revenue's case for clandestine removal.

The Tribunal upheld the liability of the seized goods for penalty but reduced the redemption fine and personal penalties considering the circumstances of the case. The distinction from a previous Tribunal case was deemed relevant in this judgment. The penalty on the partner was set aside as the penalty on the partnership unit sufficed. Both appeals were disposed of accordingly.