2005 (9) TMI 166 - AT - Central Excise

Summary

Issues Involved:
1. Challenge to the confirmation of Central Excise duty for 28 invoices out of 107.
2. Imposition of penalty and recovery of interest.
3. Challenge to the setting aside of the demand in respect of 89 invoices.
4. Confiscation of goods seized in the factory premises.
5. Reduction in mandatory penalty imposed by the adjudicating authority.

Issue-wise Detailed Analysis:

1. Challenge to the Confirmation of Central Excise Duty for 28 Invoices:
The appellant challenged the order confirming the demand for Central Excise duty for 28 invoices. The Commissioner (Appeals) had confirmed the order-in-original of the Joint Commissioner, which found that the appellant clandestinely removed goods without paying the appropriate duty. The evidence included 28 packing slips corresponding to the invoices, which were recovered from the consignees. The Tribunal found sufficient corroboration from the statements of the commercial assistant of the consignees and upheld the demand for these 28 invoices.

2. Imposition of Penalty and Recovery of Interest:
The appellant also challenged the imposition of a penalty equal to the duty calculated for the 28 invoices and the recovery of interest. The adjudicating authority had imposed a mandatory penalty under Section 11AC read with Rule 173Q, which was reduced by the Commissioner (Appeals). The Tribunal upheld the reduced penalty and the interest recovery, stating that there was no valid reason to interfere with the impugned orders.

3. Challenge to the Setting Aside of the Demand in Respect of 89 Invoices:
The Revenue challenged the setting aside of the demand for 89 invoices. The Commissioner (Appeals) had set aside the demand on the grounds that no packing slips were found corresponding to these invoices. The Tribunal agreed with the Commissioner (Appeals), noting that there was no specific admission or evidence of excess removal for these 89 invoices. The general statement of the appellant's employee was insufficient to infer clandestine removal on a pro rata basis.

4. Confiscation of Goods Seized in the Factory Premises:
The Revenue also challenged the setting aside of the confiscation of goods seized in the factory premises. The Commissioner (Appeals) had set aside the order of confiscation, and the Tribunal upheld this decision. The Tribunal referred to the Bhillai Conductors case, which required mens rea for confiscation under Clause (d) of Rule 173Q(1). Since the show cause notice alleged contravention of Rules 53 and 173G, which require mens rea, the confiscation could not be sustained in the absence of evidence of guilty intent.

5. Reduction in Mandatory Penalty Imposed by the Adjudicating Authority:
The Revenue also challenged the reduction in the mandatory penalty imposed by the adjudicating authority. The Tribunal upheld the reduced penalty, finding no warrant for interfering with the penalty corresponding to the confirmed demand. The Tribunal noted that the appellant had fraudulently removed excisable goods by preparing false invoices showing lesser quantity, justifying the penalty.

Conclusion:
The Tribunal dismissed both appeals, upholding the confirmation of duty and penalty for 28 invoices, the setting aside of the demand for 89 invoices, and the setting aside of the confiscation of goods. The Tribunal also upheld the reduced penalty and the recovery of interest, finding no valid reason to interfere with the impugned orders.