2010 (9) TMI 1213 - AT - Central Excise

Summary

Issues involved: Appeal against order of Commissioner (Appeals) regarding confiscation of unaccounted stock of detergent cakes and penalty imposition.

Summary:
1. Confiscation of Goods and Penalty Imposition:
The officers found unaccounted stock of detergent cakes bearing other parties' brand names along with the respondent's brand. The original authority confiscated the goods but allowed redemption on payment of fine and imposed a penalty under Rule 25 of the Central Excise Rules, 2002. The Department appealed against the Commissioner (Appeals) setting aside the confiscation order and reducing the penalty.

2. Department's Argument:
The Department argued that the claim of mistaken supply of packing materials was erroneous, as a significant amount of goods with other brand names were unaccounted for. Non-accountal of manufactured goods renders them liable for confiscation and justifies penalty imposition. The Department also contested the reduction of the penalty amount.

3. Respondent's Defense:
The respondents claimed that the packing materials were mistakenly supplied and used due to illiterate laborers. They asserted that the unaccounted goods were meant to be entered in records and cleared with appropriate duty payment. Citing a court decision, the respondents argued against the presumption of clandestine removal.

4. Judgment and Analysis:
The Tribunal considered both sides' submissions and found discrepancies in the respondent's defense. While giving the benefit of doubt to the respondents regarding clandestine removal, the Tribunal upheld the confiscation of goods and penalty imposition due to irregular maintenance of accounts. The Commissioner (Appeals) was deemed to have erred in setting aside the confiscation order.

5. Decision and Order:
The Tribunal set aside the Commissioner (Appeals) order and restored the original authority's decision on confiscation and penalty imposition. However, the redemption fine was reduced from Rs. 4,50,000 to Rs. 2,00,000. The absence of a specific duty demand was noted, with the goods reportedly accounted for and cleared subsequently.