2005 (6) TMI 93 - AT - Central Excise

Summary

Issues:
1. Seizure of finished goods without proper accountal in RG 1 Register.
2. Uncancelled invoice and non-furnishing of D3 intimation.
3. Confiscation of goods, imposition of penalties under Rules 173Q and 210.

Analysis:

1. The officers found finished goods valued at about Rs. 7.3 lakhs in the Quality Control Room without proper accountal in RG 1 Register. The seized goods were released provisionally to the appellants on execution of bond and production of cash security. The Department issued a show-cause notice proposing to confiscate the seized goods under Rule 173Q and to impose penalties under Rules 173Q and 210. The original authority confiscated the goods with a Redemption Fine of Rs. 1 lakh and imposed a penalty of Rs. 17,000 on the party. The appeal filed against this decision was rejected by the Commissioner (Appeals).

2. The appellants argued that the goods seized had not reached the RG1 stage and were not liable for confiscation. They also explained that the uncancelled invoice was due to unavoidable circumstances, such as the unavailability of staff to cancel the invoice on time. Regarding the goods returned by the customer, the appellants admitted the failure to give D3 intimation but claimed no intention to evade duty as the recast goods were cleared with duty payment. The Tribunal found substance in the appellants' contention that the seized goods had not reached the RG1 stage, making their confiscation unsustainable. The Tribunal also noted confusion in the show-cause notice and the imposition of a composite penalty under two independent penal provisions, which was deemed unsustainable in law.

3. The Tribunal observed that the seized goods had not reached the required RG1 stage for confiscation. It was noted that Rule 210, a residual penal provision, was invoked without clear justification. The confusion in the show-cause notice and the imposition of a composite penalty under two separate provisions were found to be legally unsustainable. Consequently, the Tribunal set aside the impugned order and allowed the appeal.

This detailed analysis of the judgment addresses the issues of seizure of goods without proper accountal, uncancelled invoice, and non-furnishing of D3 intimation, along with the confiscation of goods and imposition of penalties under relevant rules.