2010 (10) TMI 517 - AT - Central Excise

Confiscation of goods - Penalty - The allegation against the appellant is that the production of 3 days was not entered in their statutory record and hence the goods are liable for confiscation - From the record, nothing is made out whether the appellant have intention to clear these goods without payment of Central Excise duty - The mere allegation is that the goods were not entered in their statutory record - As the appellant explained satisfactorily why the statutory record could not be produced during investigation, the goods cannot be held liable for confiscation - Accordingly, the confiscation of goods is set aside - With regard to penalty, there is no allegation against the appellants that they have played fraud, collusion, suppression of facts or mis-statement of facts with intention to evade duty - Hence no penalty is leviable on the appellant - Decided in favour of assessee.

Summary

Issues: Imposition of redemption fine and penalty under Rule 25 of the Central Excise Rules based on non-availability of statutory records and alleged clandestine removal of goods.

Imposition of Redemption Fine and Penalty:
The appellant filed an appeal against the imposition of redemption fine and penalty under Rule 25 of the Central Excise Rules. The case revolved around the absence of statutory records during a visit by preventive officers to the factory. The officers found finished and semi-finished goods, leading to a show cause notice and subsequent imposition of redemption fine and penalty by lower authorities. The appellant argued that the factory was closed due to power failure, and the statutory records could not be produced during the visit as the clerk responsible for records was not available. The appellant contended that there was no intention to remove goods clandestinely. The Tribunal noted that production started after the factory reopened, and the records were eventually produced, with raw material entries accepted but finished goods entries rejected. The Tribunal found that the mere absence of entries did not prove intent to evade duty, leading to the setting aside of the confiscation of goods. Moreover, as there was no evidence of fraud, collusion, or suppression of facts by the appellant, no penalty was deemed leviable. Consequently, the appeal was disposed of in favor of the appellant.

Key Points:
- Absence of statutory records during a visit by preventive officers.
- Allegation of clandestine removal of goods due to missing entries.
- Factory closure due to power failure leading to delayed record production.
- Acceptance of raw material entries but rejection of finished goods entries.
- Lack of evidence supporting intent to evade duty.
- Absence of fraud, collusion, or suppression of facts by the appellant.
- Setting aside of confiscation of goods and non-leviability of penalty based on satisfactory explanations provided by the appellant.