2008 (7) TMI 430 - HC - Central Excise

Summary

Issues involved: The issues involved in the judgment are (A) justification of upholding Commissioner (Appeal)'s order regarding confiscation of seized goods and imposition of redemption fine, (B) justification of upholding the order of reducing penalty imposed on the respondent under Rule 173-Q (1) of Central Excise Rules, 1944, and (C) justification of upholding the order that the revenue has no proof of intent to evade payment of duty for penalty imposed under Rule 173Q of Central Excise Rules, 1944.

Issue (A): The Adjudicating Authority ordered confiscation of seized goods, fixed redemption fine, and imposed penalty based on the findings that certain goods were not accounted for in the RG1 register, indicating possible clandestine removal. However, the Commissioner (Appeals) and the Tribunal found no evidence of clandestine removal or intention to evade duty. The Commissioner (Appeals) noted that the goods in question were not entered in the register due to legitimate reasons, such as pending tests and holiday closures. The Tribunal upheld these findings, concluding that no interference was warranted as the goods were found in the factory premises.

Issue (B): The Appellate Authorities, including the Commissioner (Appeals) and the Tribunal, reduced the penalty imposed on the respondent under Rule 173-Q (1) of Central Excise Rules, 1944. This reduction was based on the lack of evidence establishing intent to evade duty or engage in clandestine activities. The Commissioner (Appeals) specifically noted legitimate reasons for the non-entry of certain goods in the register, such as pending tests and holiday closures, which were considered reasonable explanations.

Issue (C): The Tribunal upheld the order that the revenue had no proof of intent to evade duty for the penalty imposed under Rule 173Q of Central Excise Rules, 1944. The findings of the Commissioner (Appeals) regarding the lack of evidence establishing mala fides in the non-entry of certain goods in the register were confirmed. The Tribunal concluded that no substantial question of law arose from the impugned order, especially considering the concurrent findings of the Appellate Authorities based on the evidence presented.

In summary, the judgment addressed the issues of justification for confiscation of seized goods, imposition of fines and penalties, reduction of penalties under Rule 173-Q (1) of Central Excise Rules, 1944, and the proof of intent to evade duty. The findings of the Adjudicating Authority were overturned by the Commissioner (Appeals) and the Tribunal based on the lack of evidence supporting clandestine activities or intent to evade duty, leading to the dismissal of the appeal.