1990 (7) TMI 254 - AT - Central Excise

Issues Involved:
1. Seizure and confiscation of goods without proper documentation.
2. Non-marking of lot numbers on fabrics.
3. Applicability of penalties under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.
4. Definition and scope of "excisable goods" under the Central Excises and Salt Act, 1944.

Issue-Wise Detailed Analysis:

1. Seizure and Confiscation of Goods Without Proper Documentation:
The appellants were engaged in processing fabrics on job work. The Central Excise officers intercepted 3 Cycle Carts carrying 62 Thans (pieces) of man-made fabrics near Shingar Cinema, which were removed from the factory without a gate-pass. Additionally, three Thans inside the factory were not accounted for in the RG-1 Register, and 197 Thans of Acrylic knitted fabrics were found in grey condition and not recorded in the grey goods register. The appellants argued that there was no statutory requirement for marking lot numbers on the pieces and that no adverse inference should be taken. They also contended that there was no evidence showing they were the owners of the seized goods and that the redemption fine and penalty were excessive.

The tribunal found that the place of seizure was correctly mentioned as Shingar Cinema. The statement from the Supervisor, Shri Mewa Lal, confirmed that the 62 Thans were dispatched without documents. The tribunal upheld the confiscation of the fabrics and found the redemption fine of Rs. 50,000/- reasonable. However, the penalty was reduced to Rs. 25,000/-.

2. Non-Marking of Lot Numbers on Fabrics:
The appellants contended that there was no statutory requirement for marking lot numbers on the fabrics. The tribunal noted that while this plea was not raised before the lower authorities, it appeared that registers were maintained for receipt of grey fabrics, and lot numbers were assigned to keep track of the fabric until processing was complete. The statement of Shri Surinder Arora confirmed that no lot numbers were marked on the fabrics, establishing a contravention. The tribunal upheld the confiscation and penalty.

3. Applicability of Penalties Under the Additional Duties of Excise (Goods of Special Importance) Act, 1957:
The appellants raised a legal point that the goods were not excisable and only additional duty was to be levied, with no provision for penal action. They argued that the provisions of the Central Excises and Salt Act, 1944, including those for penalties, did not apply to the Additional Duties of Excise Act. The tribunal considered various case laws and found that the provisions of the Central Excises and Salt Act, including penal provisions, applied to the Additional Duties of Excise Act. The tribunal concluded that the goods were excisable and liable for penalties under Rule 173Q.

4. Definition and Scope of "Excisable Goods" Under the Central Excises and Salt Act, 1944:
The appellants argued that the goods subject only to the Additional Duties of Excise Act were not "excisable goods" under Rule 2(d) of the Central Excises and Salt Act. The tribunal analyzed the definition of "excisable goods" and found that goods specified in the Schedule to the Central Excise Tariff Act are liable for levy, whether exempted or carrying a nil rate of duty. Therefore, man-made fabrics listed in the Schedule were considered excisable goods, and the provisions of the Central Excises and Salt Act, including penalties, applied to them.

Conclusion:
The tribunal upheld the confiscation of the fabrics and found the redemption fine reasonable. The penalty was reduced to Rs. 25,000/-. The tribunal also concluded that the provisions of the Central Excises and Salt Act, including penal provisions, applied to the Additional Duties of Excise Act, and the goods in question were considered excisable. The legal points raised by the appellants were disposed of accordingly.

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