2017 (3) TMI 233 - HC - Central Excise

Clandestine removal - excess stock of finished stock found in the premises - non-maintenance of registers - confiscation - redemption fine - Held that - assessee have admitted that they have not maintained statutory records with an intent to remove the same without preparation of invoices and without payment of any duty. They have also admitted that the good found were finished goods. Therefore, proper registers were required to be maintained - confiscation upheld. Redemption fine - Held that - taking a very lenient view the learned tribunal itself has reduced the redemption fine from ₹ 4,91,000/- to ₹ 1,00,00/- and has also reduced the penalty from ₹ 10,000/- to ₹ 2000/- only. In the facts and circumstances of the case, it cannot be said that the learned tribunal has committed any error. Appeal dismissed - decided against assessee.

Summary

Issues: Confiscation of goods, reduction of redemption fine, reduction of penalty, maintenance of statutory records.

Confiscation of Goods:
The case involved a search at the premises of the appellant, revealing an excess quantity of finished goods compared to the statutory records. The goods in excess were seized and valued at ?19,64,000. The adjudicating authority confiscated the seized goods and imposed a redemption fine of ?4,91,000, along with a penalty of ?10,000. The Commissioner (Appeals) upheld the order, leading to an appeal before the tribunal. The tribunal partly allowed the appeal, confirming the confiscation but reducing the redemption fine to ?1,00,000 and the penalty to ?2,000. The appellant challenged this decision.

Reduction of Redemption Fine and Penalty:
The appellant argued that as a 100% E.O.U., they were not required to maintain registers as per statutory rules. They contended that since no clandestine removal was alleged or found, the order of confiscation was unjustified. The respondent department opposed, citing discrepancies in maintaining records and justifying the confiscation. The court noted the lack of proper registers, excess finished goods, and admissions of not maintaining records with the intent to evade duty. Despite the leniency shown by the tribunal in reducing the fine and penalty, the court found no error in the decision.

Maintenance of Statutory Records:
Concurrent findings by all authorities indicated the appellant's failure to maintain proper registers. Statements from involved parties admitted to not keeping statutory records to avoid duty payment. The court emphasized the necessity of maintaining proper registers and upheld the order of confiscation due to the discrepancies in stock records.

The High Court, after considering the arguments and facts presented, upheld the tribunal's decision to confirm the confiscation of goods, reduce the redemption fine, and penalty. The court found no reason to interfere with the tribunal's judgment and dismissed the appeal, ruling against the appellant and in favor of the revenue department.