2013 (5) TMI 544 - AT - Central Excise

Imposition of penalty/redemption fine - confiscation - As per revenue appellant made removal of goods without payment of duty - Held that - The mobile cranes, in question, had been manufactured by M/s. Omega Construction, and the factories of M/s. Omega and M/s. Gulati are owned by same person and that M/s. Gulati Industrial Fabrication and M/s. Omega Construction are adjacent units separated only by a road. At the time of offence the units of M/s. Omega Construction and M/s. Gulati Industrial though owned by the same person, were having separate central excise registration and as such, one unit could not clear the goods to other without payment of duty and without observing central excise formalities. Appellant plead that the two mobile cranes, in question, was not in fully furnished condition, it is seen that at the time of their detention, this fact had not been pointed out. Looking to the overall facts and circumstances of the case, appellant s contravention of the central excise law is only of technical nature and as such, the level of redemption fine and penalty imposed on them is on much higher side. Accordingly, while upholding the confiscation of the goods, redemption fine is reduced to Rs.50,000 and penalties on M/s. Omega Construction and M/s. Gulati are reduced to Rs.25,000 and Rs.10,000 respectively.

Summary

Issues:
Violation of central excise rules - Detention and confiscation of mobile cranes without payment of duty and proper documentation.

Analysis:
The case involves the detention and subsequent confiscation of mobile cranes manufactured by M/s. Omega Construction Equipment Pvt. Ltd. The central excise officers found these cranes in the adjacent premises of M/s. Gulati Industrial Fabrication Pvt. Ltd. on 27th November 2007. The cranes were detained as there were no entries in the RG-I Register of M/s. Omega Construction Equipment regarding their production and clearance. Despite the appellant's explanation that the cranes were not fully finished as certain components were yet to be fitted, the department considered them fully finished and seized them. The jurisdictional Asstt. Commissioner ordered the confiscation of the cranes, imposed a redemption fine, and penalties on the involved parties for violating central excise rules.

The appeal was made to the Commissioner (Appeals) who upheld the confiscation and penalties but reduced the penalty on one of the individuals. The appellant argued that the cranes were not fully finished, and the shifting to the adjacent premises was due to space constraints. They also highlighted that a common registration had been granted for both units later. On the other hand, the Departmental Representative contended that the cranes were accepted as finished goods during the seizure and that the subsequent claim of incomplete status was an afterthought. The representative argued that the violation of central excise rules warranted the confiscation and penalties.

The judge considered the facts and submissions from both sides. While acknowledging that the cranes were not fully finished at the time of detention, the judge emphasized that the units had separate central excise registrations, requiring duty payment for inter-unit transfers. The judge deemed the violation as technical in nature and reduced the redemption fine and penalties imposed on the appellants. The confiscation was upheld, but the redemption fine and penalties were reduced significantly. Additionally, the penalty on the Manager of M/s. Omega Construction Equipment Pvt. Ltd. was set aside as it was deemed unnecessary.

In conclusion, the judgment modified the impugned order, reducing the redemption fine and penalties imposed on M/s. Omega Construction Equipment Pvt. Ltd. and M/s. Gulati Industrial Fabrication Pvt. Ltd. The penalty on the Manager was set aside, and the appeal filed by the Manager was allowed.