2002 (3) TMI 948 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods found in the factory without proper records
2. Confiscation of goods found outside the factory
3. Imposition of redemption fine and penalty under Central Excise Rules
4. Applicability of composite penalty under Section 11AC of Central Excise Act and Rule 173Q of the Rules

Confiscation of Goods Found in the Factory:
The appellants contended that the goods found in the factory were not intended for removal without duty payment. They relied on previous Tribunal decisions emphasizing the difference between 'accounting for' and 'entry into statutory record'. The Tribunal held that if goods are accounted for by the assessee but not entered into statutory records, they are not liable for confiscation. However, since the appellants failed to produce any record proving the goods were accounted for, the confiscation was deemed valid.

Confiscation of Goods Found Outside the Factory:
The appellants did not contest the demand of duty for goods found outside the factory. The revenue asserted that these goods were liable for confiscation, citing a Supreme Court decision supporting their position that goods not available can still be confiscated. The Tribunal upheld this argument, affirming the confiscation of goods found outside the factory.

Redemption Fine and Penalty Imposition:
The adjudicating authority had imposed a redemption fine and penalty under Section 11AC of the Central Excise Act and Rule 173Q of the Rules. The appellants argued that the redemption fine was excessive compared to the total demand. The Tribunal considered the circumstances and reduced the redemption fine while upholding the rest of the order.

Composite Penalty Under Central Excise Act and Rules:
The appellants objected to the imposition of a composite penalty under Section 11AC of the Central Excise Act and Rule 173Q of the Rules. Citing a Tribunal decision, the composite penalty was set aside. The Tribunal emphasized that the composite penalty was not sustainable under the prevailing legal framework.

In conclusion, the Tribunal disposed of the appeal by reducing the redemption fine but upholding the rest of the order, considering the facts and circumstances of the case.