2008 (8) TMI 268 - HC - Central Excise

Both the appellate authorities have concurrently found on facts that the Texturised Yarn was not in excess but was only separately stacked and the entire stock of Anti-Static Oil which was issued for production was in the production department and as such there was no excess stock - not a case of clandestine removal, but there was a technical default in maintenance of statutory records - CESTAT was justified in upholding Commissioner (A) s order inasmuch as reducing penalty imposed for non-accountal of goods in RG-1 Register

Summary

Issues:
1. Justification of upholding the order for confiscation of seized goods and imposition of redemption fine by Hon'ble CESTAT.
2. Justification of upholding the order of reducing penalty under Rule 173Q(1) of Central Excise Rules, 1944 by Hon'ble CESTAT.
3. Rightfulness of upholding the order that penalty imposed under Rule 173Q(1) of Central Excise Rules, 1944 was not warranted by Hon'ble CESTAT.

Analysis:
1. The appellant-revenue challenged the decision of the Commissioner (Appeals) and the Tribunal regarding the confiscation of seized goods and imposition of redemption fine. The appellant argued that there was no mala fide intention on the part of the respondents in not entering the goods in the RG-1 Register. However, the authorities found excess stock of texturised yarn and Anti-static Oil, leading to the confiscation order and penalty under Rule 173Q(1) of the Central Excise Rules, 1944. The adjudicating authority justified the actions based on the discrepancies in stock records.

2. The Commissioner (Appeals) had a different view, stating that the excess stock was not for clandestine removal but a technical default in maintaining records. The Commissioner reduced the penalty imposed under Rule 173Q(1) to Rs. 2,000 and set aside the confiscation orders. The Tribunal upheld these findings, concluding that there was no excess stock of Texturised Yarn and the Anti-Static Oil was used for production without any clandestine intent. The penalty was partially sustained for the record-keeping default.

3. The Tribunal's decision was based on factual findings that supported the absence of any illegal intent for clandestine removal. Both the Commissioner (Appeals) and the Tribunal concurred that the discrepancies were due to technical record-keeping errors rather than intentional evasion. The Tribunal found no legal infirmity in the Commissioner's decision and dismissed the appeal, stating that there was no substantial question of law requiring further consideration. The appellant's challenge was not upheld due to the lack of legal grounds for interference.

This detailed analysis highlights the progression of the case, the arguments presented by the appellant, the decisions of the lower authorities, and the final judgment of the Tribunal based on factual and legal considerations.