2017 (12) TMI 230 - AT - Central Excise

Non-accountal of goods in the statutory records - Confiscation u/r 25 in conformity or not? - redemption fine - penalty - Held that - for non-accountal of goods in the statutory records, the same were confiscated by the department under Rule 25 ibid. Since confiscation of un-accounted for finished goods in the factory is in-conformity with Rule 25 ibid, imposition of redemption fine and penalties on the appellant M/s Girraj Jee Office Systems, is proper and justified. Penalty u/r 26 on appellant Shri Rajesh Kumar - Held that - penalty imposed on the appellant Shri Rajesh Kumar under Rule 26 ibid is not sustainable inasmuch as he is no way concerned or connected with the activities of Shri Girraj Jee Office Systems inasmuch he is the Director of Alka Furnishers (P) Ltd., which is a different company - penalty set aside. Appeal allowed in part.

Summary

Issues: Confiscation of goods under Rule 25, imposition of redemption fine and penalties, applicability of Rule 24, personal penalty under Rule 26 on a director.

Confiscation of Goods under Rule 25:
The case involved an appeal against an order confiscating finished goods and raw material by the adjudicating authority. The appellant was given the option to redeem the goods on payment of a fine. The Commissioner (Appeals) modified the order, reducing the redemption fine. The appellant argued that the seizure was not valid under Rule 24 as the goods were within the factory premises. The department contended that the confiscation was justified due to non-accountal of goods in statutory records, as per Rule 25. The Tribunal upheld the confiscation, redemption fine, and penalties on the appellant, finding it in conformity with Rule 25.

Applicability of Rule 24 and Rule 25:
The appellant argued that Rule 24, dealing with seizure of goods, was not applicable as the goods were within the factory. The department asserted that Rule 25, which provides for confiscation in cases of non-accountal of goods in statutory records, was violated, justifying the confiscation and imposition of fines and penalties. The Tribunal found the confiscation under Rule 25 valid and upheld the liabilities on the appellant.

Personal Penalty under Rule 26 on a Director:
Regarding the personal penalty imposed on the director of a different company under Rule 26, the Tribunal found it unsustainable as the director was not connected to the activities of the appellant company. The penalty on the director was set aside, and the appeal in his favor was allowed.

In conclusion, the Tribunal upheld the confiscation of goods under Rule 25, the redemption fine, and penalties on the appellant. However, it set aside the penalty imposed on the director of a different company, finding it unjustified. The appeals were disposed of accordingly.