2005 (1) TMI 304 - AT - Central Excise

Summary

Issues:
Reduction of duty demand, seizure of computers, redemption fine, penalty on Managing Director, penalty on appellant-firm, violation of natural justice, confiscation of computer parts, justification of penalties.

Reduction of Duty Demand:
The appeal arose from an Order-in-Appeal reducing the original duty demand from Rs. 4,51,695/- to Rs. 21,000/ by the Commissioner of Central Excise (Appeals). The Commissioner upheld the seizure of two computers valued at Rs. 55,000/- and a redemption fine of Rs. 10,000/-. The penalty on the Managing Director was reduced from Rs. 50,000/- to Rs. 5,000/-. However, there was no discussion regarding the penalty on the appellant-firm. The Original Authority had imposed a penalty of Rs. 50,000/-. The appellant was aggrieved over the Order-in-Appeal.

Seizure of Computers and Confiscation of Computer Parts:
The Managing Director of the Appellant-Company argued that the appellant-unit did not manufacture the two computers but bought them to supply to Nizam Institute of Medical Sciences as parts to be integrated with separately procured speech therapy equipment. The appellant contended that the department did not provide the necessary documents, especially purchase orders, which led to a lack of justification for confiscating the computer parts. The invoices presented by the appellants showed that these parts were purchased from outside. The Tribunal found that the items related to specific invoices were not liable for confiscation, given the nature of their use by Nizam Institute of Medical Sciences.

Penalties and Natural Justice:
The Tribunal noted a gross violation of the principles of natural justice as the department failed to provide relied-upon documents to the appellants despite requests. Based on the invoices produced by the appellants, it was determined that the penalties imposed on M/s. Prakash Software System, the Managing Director, and Dr. Murali Krishna were unjustified. Consequently, the Tribunal held that the penalties were not justified in this case.

Operative Conclusion:
In light of the above findings, the appeal was allowed with consequential relief, indicating that the items in question were not liable for confiscation, and the penalties imposed were deemed unjustified. The operative portion of the order was pronounced in open court at the conclusion of the hearing.