2008 (7) TMI 432 - HC - Central Excise

Penalty - clandestine removal - Held that - there is no dispute as to the fact that the goods were yet lying in factory premises - there is no evidence on record to prove clandestine removal - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Upholding of Commissioner (Appeals)'s order on confiscation and redemption fine.
2. Reduction of penalty imposed under Rule 173-Q(1) of Central Excise Rules, 1944.
3. Justification of upholding the order that the revenue has no proof of intent to evade duty.

Analysis:
1. The appellant-Revenue raised concerns regarding the decision of the Hon'ble CESTAT in upholding the Commissioner (Appeals)'s order regarding the confiscation of seized goods and imposition of redemption fine. The learned counsel for the appellant argued that there was a mala fide intention to evade duty by clandestine removal of goods, which the Commissioner (Appeals) failed to acknowledge. However, the Tribunal found no evidence presented by the Revenue to support the claim of clandestine removal. The Tribunal upheld the penalty imposed for non-maintenance of records, stating that the goods were not entered in the RG-I Register but were still in the factory premises at the time of inspection. The explanation provided by the respondent assessee was deemed plausible by both the Commissioner (Appeals) and the Tribunal, leading to the dismissal of the appeal.

2. The second issue pertained to the reduction of penalty under Rule 173-Q(1) of Central Excise Rules, 1944. The Hon'ble CESTAT was questioned for upholding the order of the Commissioner (Appeals) in reducing the penalty imposed on the respondent for non-accountal of goods in the RG-I Register. The Tribunal, after considering the arguments and evidence, concluded that the penalty imposed was justified based on the lack of proof of intent to evade duty. The Tribunal's decision was based on the absence of evidence indicating clandestine removal and the plausible explanation provided by the respondent assessee.

3. The final issue revolved around the justification for upholding the order that the revenue had no proof of intent to evade duty. The Hon'ble CESTAT was challenged for confirming the Commissioner (Appeals)'s decision in this regard. The Tribunal's finding highlighted the lack of evidence presented by the Revenue to establish that the goods were not entered in the RG-I Register for clandestine purposes. The Tribunal emphasized that the goods were still present in the factory premises during the inspection, supporting the respondent's explanation. Consequently, the Tribunal found no grounds for interference in the impugned order and dismissed the appeal, stating that no substantial question of law arose from the decision.