1993 (2) TMI 187 - AT - Central Excise

Summary

Issues:
- Confiscation of goods under various rules
- Allegation of evasion of duty
- Failure to maintain proper accounts
- Applicability of exemption notification
- Imposition of penalties

Confiscation of Goods:
The judgment deals with an appeal against the confiscation of goods under Rules 9(2), 52A, 173Q, and 226 of the Central Excise Rules, 1944, along with Section 120 of the Customs Act, 1962. The goods, including Polyvinyl Acetate Dispersion (Modified), were seized from different locations and were released provisionally under bond. The appellants were required to fulfill bond obligations, pay penalties, and duty on the seized goods.

Allegation of Evasion of Duty:
The appellants were accused of manufacturing and removing goods without paying duty or accounting for them in the RG1 Account. The goods were used for captive consumption and sold to another entity. The allegation was supported by entries in an Exercise Note Book, confirming the production and non-accounting of goods, leading to a duty evasion amounting to Rs. 84,530.04.

Failure to Maintain Proper Accounts:
The appellants argued that entries in the Exercise Note Book did not reflect actual production but only the commencement of batches. They claimed eligibility for duty exemption under a notification effective from 1-4-1985, suggesting that goods manufactured after this date should not be denied exemption. The argument also questioned the confiscation of goods eligible for exemption.

Applicability of Exemption Notification:
The appellants contended that goods entitled to duty exemption from 1-4-1985 should not be confiscated. The consultant argued that the Collector's order of confiscation conflicted with examining eligibility for exemption under specific notifications, questioning the justification for confiscation in such cases.

Imposition of Penalties:
The Departmental Representative argued that the failure to enter goods in the RG1 Account and the breach of Rule 52A warranted penalties. The Collector imposed a penalty of Rs. 50,000 due to the value of goods exceeding Rs. 2 lakhs. The appellants sought leniency based on a previous tribunal decision, highlighting the absence of malafides.

Conclusion:
The Tribunal rejected the appellants' arguments, upholding the confiscation of goods and penalties imposed. The judgment emphasized the suppression of production and failure to account for excisable goods, justifying the confiscation under relevant rules and Acts. The appeal was dismissed, affirming the original order of confiscation, penalties, and fines.