2000 (2) TMI 148 - AT - Central Excise

Summary

Issues Involved:
1. Allegation of clandestine removal of ball bearings.
2. Non-accountal of 5878 pcs. of ball bearings.
3. Demand of duty and imposition of penalty.
4. Confiscation of goods and plant, building, and machinery.

Summary:

1. Allegation of Clandestine Removal:
The appellant was accused of illicitly removing ball bearings without accounting for them in statutory records and without preparing duty-paying documents. The Preventive staff found excess stock of 5878 pcs. of ball bearings and a shortage of 445 pcs. during their visit. The private records maintained by the unit were seized, revealing discrepancies between the private records and the RG 1 register. The appellant argued that the private rough book was maintained by laborers for their convenience and not in compliance with excise law. The Tribunal found that the private records alone, without corroborative evidence such as raw material usage, could not establish clandestine removal. The Tribunal referred to previous judgments (1989 (39) E.L.T. 655 and 1992 (59) E.L.T. 175) which held that unauthenticated private records are not reliable evidence for proving clandestine removal.

2. Non-Accountal of 5878 pcs. of Ball Bearings:
The appellant admitted to a technical lapse in not entering 5878 pcs. found in BSR in the RG 1 register, attributing it to the concerned person being out of station. The Tribunal noted that the goods were meant for export and were indeed exported after release. The Tribunal found that the non-accountal did not indicate an intention of clandestine removal and considered it a minor lapse.

3. Demand of Duty and Imposition of Penalty:
The impugned order demanded central excise duty on the shortfall and excess stock of ball bearings and imposed a penalty of Rs. One lakh. The appellant contested the demand and penalty, arguing that the private records were not reliable evidence. The Tribunal found that the department failed to provide corroborative evidence for the clandestine removal and accepted the appellant's explanation regarding the private records. The Tribunal reduced the penalty from Rs. One lakh to Rs. 2,000/- u/r 226 of the Central Excise Rules.

4. Confiscation of Goods and Plant, Building, and Machinery:
The impugned order also included the confiscation of 5878 pcs. of ball bearings, land, building, plant, and machinery with redemption fines. The Tribunal set aside the confiscation order, noting that the charge of clandestine removal was not established and the goods were exported. The enforcement order of the bond executed for the release of 5878 pcs. of ball bearings was also set aside.

Order:
The appeal was allowed in part. The demand of duty and confiscation order was set aside. The penalty was reduced to Rs. 2,000/-. The order relating to 445 pcs. and 100 pcs. was confirmed as not pressed. The appellant was entitled to consequential relief.