2015 (10) TMI 1986 - AT - Central Excise

Manufacture of aluminium circles as intermediate product - marketability of aluminium circles - Manufacturer of aluminium utensils as finished goods - Benefit of Notification No.6/2000-Sr.No.206 - Confiscation of goods - Imposition of redemption fine and penalty - Held that - It is not under dispute that the appellant themselves were purchasing such aluminium circles from the market. This itself shows that the goods are marketable. We, therefore, do not find any strength in the submissions of the appellant that the goods produced are not marketable. - Demand confirmed invoking extended period of limitation with penalty u/s 11AC - Amount of redemption fine reduced - Penalty on the partner of the firm reduced - Decided partly in favour of assessee.

Summary

Issues:
1. Duty liability on the manufacture of aluminium circles.
2. Confiscation of goods and imposition of redemption fine.
3. Imposition of penalty on the partner of the appellant firm.
4. Benefit of Notification No.6/2000-Sr.No.206.

Analysis:

1. Duty liability on the manufacture of aluminium circles:
The case involved the appellant, a manufacturer of aluminium utensils, who used aluminium circles as an intermediate product in their manufacturing process. The appellant was not paying duty on the manufacture of aluminium circles, which led to investigations and subsequent detention and seizure of the goods. The Tribunal confirmed the demand for duty, interest, and penalty, as the appellant failed to register and inform the department about their activities. The Tribunal upheld the duty liability on the aluminium circles as they were marketable goods, and the appellant had purchased similar circles from the market, indicating their marketability.

2. Confiscation of goods and imposition of redemption fine:
Goods valued at a certain amount were detained and subsequently seized. The Tribunal reduced the redemption fine from Rs. 2 lakhs to Rs. 10,000, considering the value of the goods detained and the duty amount worked out for the period. The reduction was based on the goods being seized for captive consumption in the factory and the proportionality of the fine to the value of the goods and duty amount.

3. Imposition of penalty on the partner of the appellant firm:
A penalty of Rs. 1 lakh was initially imposed on the partner of the appellant firm. However, the Tribunal reduced the penalty to Rs. 10,000, considering the duty amount and the appellant being a small unit. The reduction was also based on the appellant's prompt payment of duty during the investigation and their lack of familiarity with excise procedures.

4. Benefit of Notification No.6/2000-Sr.No.206:
The Tribunal discussed the applicability of Notification No.6/2000-Sr.No.206, which provided a specific rate of duty subject to certain conditions. It was noted that the appellants satisfied the specified conditions, and therefore, the notification did not impact the duty liability on the aluminium circles.

In conclusion, the appeals were dismissed except for the reduction in the redemption fine and penalty, emphasizing the proportionality of penalties and fines based on the circumstances of the case and the appellant's conduct.