1988 (1) TMI 195 - AT - Central Excise

Summary

Issues:
- Confiscation of goods stored in an unauthorized premises
- Imposition of penalty under Central Excise Rules
- Exemption of goods from Central Excise duty
- Application of Rule 173Q and Rule 210
- Mala fide intention of the appellants

Confiscation of Goods Stored in an Unauthorized Premises:
The Collector of Central Excise, Kanpur held that premiered scooter bodies stored by the appellants in an unauthorized premises were liable for confiscation. The goods were released provisionally but the bond was enforced for Rs 5,000. The appellants argued that they had permission to store the goods until a certain date, but due to space constraints, they could not move the goods. The Collector imposed a penalty and held the goods liable for confiscation due to storage in an unauthorized premises.

Imposition of Penalty under Central Excise Rules:
The appellants argued that there was no mala fide intention on their part and that the premiered scooter bodies were not goods meant for sale in the market but intermediate products. They cited various judgments to support their contention. The Collector imposed a penalty under Rule 173Q and Rule 210 of the Central Excise Rules. The appellants contended that no penalty should have been imposed as the goods were not excisable and there was no intent to evade duty.

Exemption of Goods from Central Excise Duty:
The Collector mentioned that the goods were exempted from Central Excise duty under specific Notifications. The appellants had applied for permission to store the goods, which was granted until a certain date. However, they did not seek an extension, leading to the seizure of the goods. The Collector acknowledged the exemption but still imposed the penalty under the Central Excise Rules.

Application of Rule 173Q and Rule 210:
The Collector invoked Rule 173Q for non-accountal of premiered bodies in the statutory records and Rule 210 for imposing the penalty. The appellants argued that since the goods were exempted from duty and were not excisable, they were not required to be accounted for in the statutory records. They contended that no penalty should have been imposed based on the Supreme Court judgment.

Mala Fide Intention of the Appellants:
The appellants maintained that there was no mala fide intention on their part regarding the storage of the goods in the unauthorized premises. They argued that had there been any intention to evade duty, they would not have applied for permission to store the goods. The Tribunal found no mala fide intent and ruled in favor of the appellants, setting aside the impugned order and allowing the appeal.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, stating that the goods were exempted from Central Excise duty and were not required to be accounted for in the statutory records. The Tribunal found no mala fide intention on the part of the appellants and ruled that no penalty should have been imposed under Rule 173Q or Rule 210 of the Central Excise Rules.