2005 (8) TMI 240 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmation against M/s. Bunty Foods (I) Pvt. Ltd.
2. Imposition of penalties under Rule 173Q(1) of the Central Excise Rules, 1944.
3. Confiscation of seized goods and imposition of redemption fine.
4. Recovery of interest and penalties on the Director of M/s. Bunty Foods (I) Pvt. Ltd. and M/s. Parle Products Ltd.

Analysis:

1. Duty Demand Confirmation:
The appeals arose from the duty demand confirmation of Rs. 37,05,621.25 against M/s. Bunty Foods (I) Pvt. Ltd. The duty demand was related to a part quantity of broken biscuits in the manufacturing process of Parle-G Biscuits on a job work basis. The Commissioner of Central Excise, Mumbai, upheld the duty demand and imposed penalties under Rule 173Q(1) of the Central Excise Rules, 1944, along with Section 11AC of the Central Excise Act, 1944.

2. Imposition of Penalties:
Penalties were imposed for the non-accounting of broken biscuits and sugar syrup in the RG-1 register. The Tribunal considered the evidence presented, including a private register maintained by the Director of M/s. Bunty Foods (I) Pvt. Ltd. The register showed entries for broken biscuits from 1-4-1996. The Tribunal accepted the contention that broken biscuits were recycled and used in the manufacturing process of fresh biscuits, leading to no duty liability on broken biscuits. Consequently, the duty demand was set aside, and penalties were also revoked.

3. Confiscation of Seized Goods and Redemption Fine:
The seized goods were deemed liable for confiscation by the Commissioner of Central Excise, Mumbai, who also imposed a redemption fine of Rs. 2000/-. However, the Tribunal, after considering the evidence and arguments, set aside the confiscation of the seized goods, providing consequential relief in accordance with the law.

4. Recovery of Interest and Penalties:
Apart from the duty demand and penalties, recovery of interest and penalties was ordered on the Director of M/s. Bunty Foods (I) Pvt. Ltd. and M/s. Parle Products Ltd. The Tribunal found that since the duty demand on broken biscuits was set aside, the cause for imposing penalties no longer existed. Consequently, the penalties on both entities were also set aside.

In conclusion, the Tribunal set aside the impugned order, allowed the appeals, and provided consequential relief after overturning the confiscation of the seized goods.