2016 (12) TMI 1164 - AT - Central Excise

Seizure - Penalty - Rule 27 of CER, 2002 - Held that - It was also observed that though there was escapement of recording of the finished goods, but the ingredients of Section 11AC were found to be absent - It was observed that since the goods were found in the factory itself, on the date of inspection dated 19/9/2007, imposition of redemption fine was unwarranted - In the course of argument the learned counsel for the appellant have produced the original RG-I register wherein the said quantity of 6945.89 kg. of copper sheet etc. have found to be entered on 14/01/2008 - decided in favor of appellant-assessee.

Summary

Issues involved:
1. Whether finished goods found unrecorded at the time of inspection were cleared on payment of duty.
2. Allegation of clearance of goods without payment of duty.
3. Refund of pre-deposit amount.

Analysis:
1. The appeal raised the issue of finished goods found unrecorded in the RG-1 register at the time of inspection and whether they were cleared on payment of duty. In a previous round of litigation, it was noted that duty for the excess goods had been recovered, but the ingredients of Section 11AC were found to be absent. The penalty imposed under Rule 27 was reduced to ?5,000, and the redemption fine was deleted. When the appellant sought a refund of the pre-deposit amount, a show cause notice was issued alleging non-payment of duty for the seized goods. However, it was clarified that the duty element on the excess goods had been recovered, and the amount was no longer recoverable. The appeal was allowed, and the appellant was entitled to a refund of the pre-deposit with interest.

2. The allegation of goods being cleared without payment of duty was addressed during the argument. The appellant's counsel presented the original RG-I register showing the entry of the seized goods on 14/01/2008. It was confirmed that the duty element on the excess goods had been recovered, as the appellant had made the necessary deposit to resolve the dispute. Consequently, the amount of ?4,77,663 was deemed no longer recoverable, and the appellant was granted the refund of the pre-deposit amount with interest. The impugned order was set aside in favor of the appellant.

3. The issue of refund of the pre-deposit amount was resolved in favor of the appellant, as it was established that the duty element on the excess goods had been recovered, and the appellant was entitled to the refund with interest as per the rules. The order dictated in the open court allowed the appeal and set aside the impugned order, ensuring the appellant's right to the refund of the pre-deposit amount.