2009 (1) TMI 128 - HC - Central Excise

Reduction of redemption fine - duty had been paid by the appellant within the prescribed period, copies of invoices were produced before the officers on very date when they visited the factory, as also assessee had sufficient funds in the Cenvat credit and PLA for discharging the duty; redemption fine was rightly reduced by Tribunal - when the Officers visited the factory, no panchnama was prepared and there was no evidence to suggest that the respondent had removed the goods found short clandestinely so demand is not justified penalty was also reduced rightly

Summary

Issues:
1. Reduction of redemption fine from Rs. 3,75,000/- to Rs. 35,000
2. Deletion of duty of Rs. 22,000/- imposed on account of shortage of goods
3. Reduction in penalty to Rs. 30,000/-

Analysis:

1. The appellant contended that the Tribunal's judgment was erroneous in reducing the redemption fine, deleting the duty imposed for goods shortage, and lowering the penalty amount. However, the court disagreed with the appellant's arguments. The Tribunal considered various factors, such as timely duty payment, production of invoices, and availability of funds for duty discharge, before reducing the redemption fine. The court found no reason to disagree with the Tribunal's decision, stating that the Tribunal appropriately exercised its discretion in the matter.

2. Regarding the deletion of the demand for Rs. 22,829 due to goods shortage, the Tribunal found that no panchnama was prepared when officers visited the factory, and there was no evidence of clandestine removal of goods. Consequently, the Tribunal rightfully deleted the duty demand related to the goods found short. The court concurred with this factual finding by the Tribunal.

3. The issue of penalty reduction was raised by the respondent's counsel, arguing that a significant portion of the penalty was not imposed under Section 11AC but under a different rule. The Tribunal's decision to reduce the penalty was upheld by the court as the Department did not challenge this aspect in the appeal. The court noted that the duty was paid within the specified time, and part of the demand was unsustainable. Consequently, the court found no substantial legal question for consideration and dismissed the appeal.

In conclusion, the court upheld the Tribunal's decisions on all three issues, finding no merit in the appellant's arguments and dismissing the appeal under Section 35G of the Central Excise Act, 1944.