2008 (11) TMI 178 - AT - Central Excise

Demand and Recovery Clandestine Removal - the vehicle carried a consignment of 4000 kgs of potassium chlorate whereas the transport documents issued in terms of Rule 11A of CER covered only 1000 kgs of potassium chlorate. The explanation that the driver had omitted to collect another invoice which covered the balance 3000 kgs of potassium chlorate is not acceptable. The d-river is expected to know and is bound to carry the appropriate duty paying documents when he sets out on a trip carrying a consignment of goods exigible to duty of excise. - The only reasonable inference possible in the circumstances is that the 3000 kgs of potassium chlorate had been cleared by RCPL without payment of duty for delivery Demand of Duty, Penalty and Confiscation upheld however personal penalty reduced.

Summary

Issues:
1. Seizure of potassium chlorate and vehicle by Central Excise officers.
2. Allegations of clandestine clearance and contravention of Central Excise Rules.
3. Imposition of penalties on the manufacturer, Managing Director, and driver.
4. Appeal challenging the penalties and confiscation orders.
5. Compliance with duty payment and issuance of transport documents.

Seizure of Potassium Chlorate and Vehicle:
The case involved the interception of a van carrying 4000 kgs of potassium chlorate, with discrepancies in the accompanying documents. The vehicle and goods were seized by Central Excise officers, leading to a Show Cause Notice proposing confiscation, duty demand, and penalties.

Allegations of Clandestine Clearance:
The main issue revolved around the alleged clandestine clearance of 3000 kgs of potassium chlorate without appropriate documentation. The Commissioner upheld the confiscation, fines, and penalties, citing contravention of Rule 11 of Central Excise Rules.

Imposition of Penalties:
Penalties were imposed on the manufacturer, Managing Director, and driver for their roles in the incident. The Tribunal considered the responsibilities of the Managing Director in ensuring compliance with the law, leading to the affirmation of penalties under Rule 26 of Central Excise Rules.

Appeal and Compliance with Duty Payment:
The appellants challenged the penalties and confiscation orders, arguing against the presumption of clandestine clearance. The Tribunal upheld the original authority's decision, emphasizing the importance of proper documentation and compliance with duty payment obligations.

Compliance with Duty Payment and Transport Documents:
The Tribunal found that the duty had been promptly paid before the Show Cause Notice, but the fines imposed were reduced due to the penal liabilities already imposed on the manufacturer, Managing Director, and driver. The fines were adjusted to Rs. 5000 each, while the impugned order was sustained.

In conclusion, the judgment highlighted the significance of adherence to Central Excise Rules, proper documentation, and the responsibilities of key personnel in ensuring compliance. The penalties and fines were upheld, with adjustments made considering the circumstances of the case and the duty payment compliance.