2000 (8) TMI 215 - AT - Central Excise

Summary

Issues:
1. Confiscation of excess stock of M.S. Ingots and Runners and Risers.
2. Imposition of redemption fine and penalty under Central Excise Rules.
3. Reduction of fine and penalty by the Commissioner (Appeals).
4. Appeal by the department regarding penalty under Rule 173Q.
5. Interpretation of Rules 173Q and 226 in relation to confiscation and penalty.
6. Consideration of mens rea in non-accountal of goods in RG-I register.
7. Applicability of penalty under Rule 226 in absence of mens rea.

Analysis:
1. The case involved the confiscation of excess stock of M.S. Ingots and Runners and Risers valued at Rs. 15,23,904/- for Central Excise duty, seized by Anti-Evasion officers. The Dy. Commissioner ordered confiscation with an option for redemption on payment of a fine and imposed a penalty under Rule 173Q read with Rule 226 of the Central Excise Rules, 1944.

2. The Commissioner (Appeals) reduced the fine and penalty, citing non-entry of goods in the RG-I register, leading to a decision under Rule 226 instead of Rule 173Q. The department appealed, arguing for the imposition of the original penalty under Rule 173Q.

3. The Tribunal considered the issue of penalty under Rule 173Q versus Rule 226, emphasizing the absence of mens rea in the non-accountal of goods in the register. Referring to a previous case, the Tribunal highlighted that a penalty of Rs. 2000/- suffices for non-accountal without mens rea under Rule 226.

4. By majority decision, the Tribunal held that in the absence of mens rea, neither confiscation of goods nor imposition of penalty under Rule 173Q is sustainable. The Tribunal reiterated that only a penalty of Rs. 2000/- can be imposed under Rule 226 in such cases.

5. Considering the circumstances and absence of mens rea, the Tribunal upheld the Commissioner (Appeals)'s decision, dismissing the department's appeal for enhancement of penalty under Rule 173Q. The Tribunal found no infirmity in the impugned order, leading to the dismissal of the department's appeal.

This detailed analysis covers the issues of confiscation, imposition of fines and penalties, interpretation of relevant rules, consideration of mens rea, and the applicability of penalties in the absence of mens rea, providing a comprehensive overview of the judgment.