1987 (12) TMI 203 - AT - Central Excise

Summary

Issues Involved:
1. Demand of duty on 2645 drums of electric wire and cable.
2. Confiscation of the seized 330 coils of electric wire and cable.
3. Imposition of personal penalty.

Issue-Wise Detailed Analysis:

1. Demand of Duty on 2645 Drums of Electric Wire and Cable:
The appellants were found to have manufactured and cleared 2645 drums of electric wires and cables without payment of Central Excise duty and without a license. The appellants argued that they only processed the wires for M/s. Krishna Electrical Industries, who supplied the raw materials and paid the necessary duty. The Collector rejected this defense, citing the lack of evidence that M/s. Krishna Electrical Industries accounted for these drums in their records. The Member (Judicial) disagreed, stating that the appellants were not the manufacturers since they only performed job work on raw materials supplied by M/s. Krishna Electrical Industries, who shouldered the duty liability. The Member (Technical) maintained that the appellants were liable for duty as they engaged in manufacturing without a license. The third Member (Judicial) concurred with the Member (Judicial), emphasizing that the appellants were job workers and not manufacturers, thus not liable for duty. Consequently, the majority view set aside the demand for duty on the 2645 drums.

2. Confiscation of the Seized 330 Coils of Electric Wire and Cable:
The 330 coils were found unaccounted for in the RG-1 register and were seized. The appellants contended that these coils were waste materials from trial runs and not fully manufactured goods. The Collector found that these coils were in pre-measured lengths and tagged, indicating they were fully manufactured and should have been entered in the RG-1 register. The Member (Judicial) argued that the coils were not complete as they had not undergone necessary tests required by the P&T Department. However, the Member (Technical) and the third Member (Judicial) disagreed, stating that the coils were fully manufactured and should have been accounted for. The majority view upheld the confiscation of the 330 coils.

3. Imposition of Personal Penalty:
The Collector imposed a composite penalty of Rs. 1,00,000 for both the clandestine removal of 2645 drums and the non-accountal of 330 coils. Given the majority view that the demand for duty on the 2645 drums was not justified, the penalty was reconsidered. The third Member (Judicial) held that a personal penalty was warranted only for the non-accountal of the 330 coils. The final order reduced the personal penalty to Rs. 10,000, considering the circumstances and the value of the goods involved.

Conclusion:
The appeal was partly allowed. The demand for duty on the 2645 drums of electric wires and cables was set aside. The confiscation of the 330 coils was upheld with a redemption fine of Rs. 5,000. The personal penalty was reduced to Rs. 10,000.