2000 (2) TMI 175 - AT - Central Excise

Summary

Issues:
- Confiscation of goods and imposition of penalty under Rule 173Q for contraventions of Central Excise rules.
- Intention to evade duty by not entering goods in R.G. 1 register after quality control tests.
- Violation of rules and procedures related to entry in R.G. 1 register and removal of goods to bonded room.
- Arguments regarding duty evasion, penalty imposition, and intention to evade duty.

Confiscation and Penalty Imposition:
The appeal arose from an Order-in-Original confiscating 116 drums of Ciprofloxacin Hcl and imposing a penalty of Rs. 5,00,000 on the appellant for contraventions of Central Excise rules. The seized goods valued at Rs. 1,01,50,000 were not entered in the R.G. 1 register after completion of quality control tests, indicating an intention to evade duty. The Commissioner found a clear violation of rules and intention to evade duty, leading to confiscation and penalty imposition.

Intention to Evade Duty:
The Factory Manager admitted that goods were cleared without entry in the R.G. 1 register after quality control tests, only entering details at the time of goods removal. This violated Rule 173Q, which mandates immediate entry before goods removal to the bonded room. The delay in entry, goods remaining in the production room, and admission of not following procedures indicated an intention to evade duty, justifying confiscation and penalty.

Violation of Rules and Procedures:
The Factory Manager's admission of delayed entry in the R.G. 1 register after quality control tests highlighted a breach of rules. Failure to shift goods to the bonded room after tests and not following the prescribed procedure of immediate entry in the register indicated non-compliance. The Commissioner's findings of rule violation were upheld, justifying the confiscation of goods under Rule 173Q.

Arguments and Penalty Imposition:
The appellant argued no intention to evade duty due to goods being cleared for export with duty paid through PLA. However, the failure to follow prescribed procedures and delayed entry in the R.G. 1 register supported the penalty imposition. While the intention to evade duty was not proven, the violation of duty-related procedures warranted a reduced fine of Rs. 3,00,000 and penalty of Rs. 50,000. The order of confiscation was upheld, but the fine and penalty were reduced considering the overall circumstances of the case.