2002 (8) TMI 868 - AT - Central Excise

Summary

Issues:
Appeal against order-in-appeal, imposition of penalty under Section 11AC, confiscation of goods found in excess, personal penalty on Managing Director.

Analysis:
The appellant filed appeals against the common order-in-appeal passed by the Commissioner (Appeals). The case involved a shortage of raw material and final products valued at a significant amount found in the factory without proper records. The adjudicating authority confirmed the demand for the shortage of inputs and imposed penalties under Section 11AC of the Central Excise Act. Additionally, goods found in excess were confiscated with redemption fine and personal penalty imposed on the Managing Director. The appellants' contention was that duty for the inputs found short was immediately deposited, thus they should not face penal action. They argued that the adjudicating authority has discretion in imposing penalties under Section 11AC. They also referenced a Tribunal decision to support their case.

Regarding the excess goods not entered in statutory records, the appellants claimed they did not attempt to clear the goods without paying duty, and they should only be liable for contravening Rule 226 of the Central Excise Rules. The personal penalty on the Managing Director was challenged on the grounds of lack of findings regarding his involvement in duty evasion. The adjudication upheld the demand for the short inputs and the confiscation of excess goods, citing contravention of Rule 226. However, the redemption fine for excess goods was reduced, taking into account the circumstances of the case.

The penalty imposed on the firm under Section 11AC was reduced based on a Tribunal decision. The personal penalty on the Managing Director was set aside as there was no specific finding regarding his role in duty evasion, with the adjudicating authority only holding him liable under Rule 209A without discussing his actions. The judgment disposed of the appeals accordingly, reducing penalties and setting aside the personal penalty on the Managing Director.