2011 (7) TMI 747 - AT - Central Excise

Demand - Search and seizure - Adjustment of duty - Held that the findings of the original authority are detailed, the same take into account all the submissions made on behalf of the appellants and there are adequate reasons given for confirmation of the duty demanded along with interest - Held that lower appellate authority has substantially reduced the redemption fine to a very low level of 10% of the value of the goods and therefore, the redemption fine imposed does not require any further reduction - However, personal penalties reduced.

Summary

Issues: Duty liability adjustment, Disputed duty liability, Penalty reduction

Duty Liability Adjustment:
In Appeal No. E/2918-2919/09, the advocate for the appellants acknowledged the duty liability for impugned goods found in their factory and job workers' factory. However, there was a dispute regarding the adjustment of the duty amount already paid against the demanded amount. The advocate argued for the adjustment, emphasizing that it had not been done in the previous orders. The Tribunal noted the submissions and directed verification for the adjustment of the duty amount paid against the demanded amount.

Disputed Duty Liability:
Regarding the impugned goods seized from the appellants' premises in Appeal No. E/2932-2933/2009, the advocate disputed the duty liability. She contended that the Department had not conclusively established that the goods were cleared without duty payment. The advocate acknowledged the lack of correlation on record regarding the raw materials brought in and their usage by the clients. The Tribunal considered the evidence and submissions, ultimately concluding that the duty demanded was confirmed, with no case for reduction. However, it directed consideration for adjusting the part payment of the duty amount against the demand, subject to verification.

Penalty Reduction:
In Appeal No. E/2919/2009, the advocate pleaded for a penalty reduction, citing the imposition of a penalty equivalent to the duty amount on another entity of which the appellant was a director. The Tribunal partially allowed the appeal by reducing the penalty to Rs. 25,000. In Appeal No. E/2932-2933/2009, the consultant for the appellants requested a proportionate reduction in penalties imposed, considering the value of the seized goods. The Tribunal, after careful consideration, reduced the penalties for the second and fourth appellants to Rs. 25,000 and Rs. 15,000, respectively, while upholding the penalty for the third appellant. The judgment detailed the reasoning behind each penalty reduction, emphasizing proportionality based on the value of the confiscated goods.

This comprehensive analysis of the judgment highlights the key issues of duty liability adjustment, disputed duty liability, and penalty reduction, providing a clear understanding of the Tribunal's decision-making process and the considerations taken into account for each issue.