2001 (10) TMI 191 - AT - Central Excise

Summary

Issues:
1. Confiscation of excess found goods
2. Confirmation of demand of duty and penalty
3. Imposition of personal penalty

Confiscation of Excess Found Goods:
The appellant's factory was inspected, revealing an excess of Phenol Formaldehyde and a corresponding shortage of raw material. The Revenue believed the excess was for clandestine removal. The appellant argued that the excess was due to incomplete records, not intentional evasion. The Tribunal held that confiscation was unjustified due to lack of evidence for clandestine removal. However, a personal penalty of Rs. 2,000 was imposed for record-keeping failures.

Confirmation of Demand of Duty and Penalty:
The appellant received a show-cause notice for duty demand, penalty, and confiscation. The Additional Commissioner confirmed duty demand, penalty, and interest. The Commissioner (Appeals) upheld the decision but remanded for re-quantification of redemption fine. The appellant argued that the production discrepancies were due to initial operational issues and not intentional evasion. The Tribunal noted the absence of evidence for clandestine removal and set aside the duty demand and most penalties, except for a Rs. 2,000 penalty for record-keeping failures.

Imposition of Personal Penalty:
The appellant contended that the penalties were unjustified as there was no evidence of intentional duty evasion. The Tribunal agreed, setting aside most penalties except for a Rs. 2,000 penalty for record-keeping failures. The confirmation of demand of duty against the appellant was deemed unjustified due to lack of evidence for clandestine activities during the trial period of the company. The penalty of Rs. 2,000 was confirmed, and the appeal was disposed of accordingly.