1994 (7) TMI 182 - AT - Central Excise

Summary

Issues:
1. Failure to comply with central excise formalities and obtain a license.
2. Seizure of goods and imposition of penalty.
3. Applicability of duty and penalty on goods manufactured for export.

Analysis:
1. The case involved the appeal against an order passed by the Additional Collector of Central Excise, Kanpur, where officers found the appellants engaged in manufacturing footwear without complying with central excise formalities or obtaining a license. The officers seized goods and issued a show cause notice for penalty and duty demand. The appellants argued they were an SSI unit manufacturing goods exclusively for export and not required to obtain a license, citing a trade notice. The adjudicating authority dropped the duty demand for exported goods but imposed a penalty and ordered confiscation of seized goods due to non-compliance with formalities.

2. The appellants, represented by an advocate, contended that as an SSI unit producing goods solely for export, they were not obligated to obtain a central excise license based on a trade notice. The respondent, represented by a JDR, supported the findings of the Additional Collector, acknowledging the dropped duty demand for exported goods but upholding the penalty due to the appellants' failure to comply with Rule 174A and central excise formalities in manufacturing the goods.

3. The judge, after considering both sides' submissions, noted that the appellants were indeed manufacturing goods exclusively for export, and the seized goods were subsequently exported. Recognizing the technical nature of the offense regarding the failure to obtain a central excise license and comply with procedural formalities, the judge set aside the Additional Collector's order, providing consequential relief to the appellants. The judge's decision was based on the understanding that the failure to obtain a license and comply with formalities was a minor offense given the appellants' export-focused production.