2004 (12) TMI 273 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods and imposition of fine and penalty for clearing goods without proper invoice by a small scale unit engaged in manufacturing Hex Bolts.
2. Claim of exemption from Central Excise duty and requirement of statutory records for small scale units.
3. Dispute regarding the necessity of maintaining production and sales records for monitoring exemption availed by the small scale unit.

Analysis:
Issue 1: The appellant, a small scale unit manufacturing Hex Bolts, faced confiscation of goods valued at Rs. 7 lakhs, along with a redemption fine of Rs. 30,000 and a penalty of Rs. 20,000 for clearing goods without proper invoice. The appellant contested that being a small scale unit, it was not obligated to have central excise registration or maintain statutory records. The learned Counsel argued that there was no duty evasion, and hence, the confiscation and penalties were unjustified.

Issue 2: The appellant claimed full exemption from Central Excise duty up to Rs. 1 crore for the financial year 2000-01, given its total clearance being below Rs. 51 lakhs. It was highlighted that there was no obligation to keep statutory records. The Tribunal acknowledged that since the appellant's production did not exceed the exemption limit, the confiscation and penalties were deemed unwarranted, leading to their set aside with consequential relief.

Issue 3: The dispute arose regarding the necessity of the appellant to maintain production and sales records to enable authorities to monitor the correct availing of exemption. The Departmental Representative argued that the appellant was obligated to keep such records as per a Trade Notice issued by the Commissioner of Central Excise. The Tribunal emphasized that the appellant must maintain basic accounts of production as per the trade notice, and failure to do so could result in action by Revenue authorities under relevant rules.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the confiscation of goods and penalties imposed, emphasizing the importance of maintaining basic accounts of production as per the trade notice to ensure compliance with exemption provisions and avoid unnecessary penalties.