2014 (10) TMI 337 - AT - Central Excise

Seizure of goods - Discrepancy in stock - Excess goods found - held that - 74 ingots were not entered in the RG-1 register Even if 20 ingots are taken to be production of the day of visit of the officer, 54 ingots were in excess then the recorded balance. Normally, in the absence of any evidence to show that non-recording was with mala fide intention to clear the goods clandestinely, confiscation and imposition of higher redemption fine may not be justified. However, in the present case, I find that the appellant were not having sufficient stock of raw material in their records for manufacture of the said unaccounted goods. As such it becomes clear that there was an intention on the part of the assessee to remove the goods clandestinely. Accordingly, I uphold the confiscation of the goods and imposition of penalty on M/s. Kunal Enterprises. Keeping in view the fact that the said seized goods were subsequently released to the appellant and were cleared by them on payment of Central Excise duty, I reduce the redemption fine from ₹ 1,80,000/- to ₹ 75,000/- and penalty from ₹ 1,00,000/- to ₹ 50,000 - decided partly in favour of assessee.

Summary

Issues:
1. Confiscation of excess ingots and copper scrap.
2. Imposition of penalties on the manufacturing unit and a partner.
3. Reduction of redemption fine and penalties on appeal.

Analysis:
1. The appellant, engaged in manufacturing ingots and copper scrap, faced confiscation of excess goods after a visit by Central Excise Officer revealed discrepancies. Despite explanations for unrecorded ingots and raw material, confiscation was upheld due to insufficient stock records indicating a clandestine intention to remove goods. The redemption fine was reduced from Rs. 1,80,000 to Rs. 75,000, and the penalty on the manufacturing unit was decreased from Rs. 1,00,000 to Rs. 50,000.

2. The original adjudicating authority imposed penalties on the manufacturing unit and a partner, which were partially modified on appeal. The Commissioner reduced the penalty on the manufacturing unit from Rs. 2 lakhs to Rs. 1 lakh. However, the partner's penalty of Rs. 20,000 was set aside as the manufacturing unit had already been penalized, leading to the partner's appeal being allowed.

3. The appellate tribunal acknowledged the release of seized goods upon payment of Central Excise duty by the appellant. Consequently, the redemption fine and penalties were further reduced, considering the subsequent clearance of goods. The tribunal's decision balanced the enforcement of penalties with the circumstances of the case, resulting in adjustments to the financial liabilities of the appellant and the partner.