1990 (5) TMI 153 - AT - Central Excise

Summary

Issues Involved:
The issues involved in this case are non-compliance with statutory provisions regarding maintaining registers, confiscation of goods, imposition of penalty, and the justification of the penalty amount.

Non-Compliance with Statutory Provisions:
The Appellants, engaged in manufacturing man-made fabrics, were found with fully manufactured goods not entered into the required register. The officers seized the unaccounted stock, leading to a Show Cause Notice for contravention of various rules. The Appellants argued that their practice of not entering goods until packed in boxes was longstanding and known to departmental officers. However, the Adjudicating Authority ordered confiscation of goods, encashment of a bank guarantee, and imposed a penalty.

Confiscation of Goods and Imposition of Penalty:
The Appellants contested the order of confiscation and penalty, emphasizing that duty payment was not in dispute and the goods were not clandestinely removed. They argued that the practice of entry only upon packing in boxes was accepted by local officers. The Adjudicating Authority upheld the confiscation and penalty, citing non-compliance with statutory provisions and the necessity of maintaining a Lot register.

Justification of Penalty Amount:
The Appellants challenged the quantum of the penalty, asserting no evasion of duty and leniency due to local officers' awareness of the irregularity. The Tribunal reduced the penalty amount from Rs. 5,00,000 to Rs. 50,000 considering the circumstances and contributions from local officers.

Conclusion:
The Tribunal confirmed the order with modifications, reducing the penalty amount. It held that the confiscation of goods was not justified as they were within the factory premises and not clandestinely removed. The Appellants' non-compliance with statutory provisions led to the imposition of a penalty, which was reduced due to mitigating factors.