2003 (11) TMI 128 - AT - Central Excise

Summary

Issues:
Whether Central Excise Duty is demandable from M/s. Blue Blends (India) Ltd. and penalty is imposable on them along with other Appellants and whether the excisable goods are liable for confiscation.

Analysis:
The appeals arose from a common Order-in-Original where the issue involved was the demand for Central Excise Duty from M/s. Blue Blends (India) Ltd., penalty imposition, and the liability of excisable goods for confiscation. The Appellants contended that they followed a specific practice of accounting for goods in loose RG 1 Register, authenticated by Excise Officers, and that the seized goods were duly recorded. They cited precedents where non-entry in RG 1 Register was considered an administrative lapse. The demand was contested based on cancelled invoices and lack of evidence of actual clearance without duty payment. The redemption fine and penalties were also challenged as excessive, especially for individuals not directly involved in the alleged offense.

Counterarguments highlighted discrepancies in recovered invoices, statements admitting clearance without duty payment, and the discovery of a numbering machine used for fake invoices. The seized denim fabrics were found unaccounted in the statutory RG 1 Register, indicating a violation of Central Excise Rules. The argument of maintaining goods in loose condition for customer approval was countered with the requirement of entering fully finished goods in the production register. The legal position on confiscation under Rule 173Q was discussed, emphasizing that mens rea was not necessary for liability under Clauses (a), (b), and (c) of the rule.

The Tribunal upheld the demand for duty payment based on admissions by the appellants and the findings of the adjudicating authority. Confiscation of unaccounted fully finished goods was confirmed, but the redemption fine was reduced considering the goods were entered in a loose register authenticated by the Department. Penalties were imposed on the appellants for clearing excisable goods without payment of duty, with varying amounts based on individual roles and knowledge. The penalty on the Vice President was set aside due to lack of evidence of knowledge about the confiscability of the goods. Ultimately, all three appeals were disposed of accordingly.