1993 (9) TMI 234 - AT - Central Excise

Summary

Issues:
Confiscation of goods, imposition of personal penalty, proper maintenance of accounts, statutory provisions under Rule 173Q of the Central Excise Rules.

Confiscation of Goods:
The appeal challenged an order confiscating 8654 roller bearings due to discrepancies in maintaining records and production entries. The officers found discrepancies in the RG 1 register, unaccounted goods in the bonded store room, and non-debit of duty amount for goods cleared under Gate Passes. The appellants claimed technical lapses due to staff unavailability and pleaded for leniency. The Collector upheld the confiscation based on Rule 173Q(1) of the Central Excise Rules. The appellants argued that since the goods did not leave the factory premises without duty payment, confiscation was unjustified. The Tribunal acknowledged the statutory provisions but reduced the redemption fine to Rs. 30,000 due to the absence of mala fides on the appellants' part.

Imposition of Personal Penalty:
The appellants contested the imposition of a personal penalty, asserting no intention to evade duty payment. The Collector accepted the lack of mala fides but still imposed a penalty. The Tribunal overturned the penalty, citing the Collector's acknowledgment of the appellants' bona fides. The absence of justifiable grounds for the penalty led to its setting aside.

Proper Maintenance of Accounts:
The officers noted discrepancies in the RG 1 register and other production documents, indicating incomplete entries and unaccounted goods. The appellants attributed these lapses to staff shortages and technical errors. While the Department argued that inadequate record-keeping warranted a personal penalty, the Tribunal found no mala fides and set aside the penalty based on the Collector's acceptance of the appellants' contentions.

Statutory Provisions under Rule 173Q of the Central Excise Rules:
The Tribunal considered Rule 173Q, which allows confiscation of goods stored in contravention of statutory provisions. Despite the upheld confiscation, the Tribunal reduced the redemption fine due to the absence of mala fides. The judgment cited by the appellants from the Andhra Pradesh High Court did not assist their case under the amended Rule 173Q. The Tribunal emphasized that while the confiscation was justified under the law, leniency was warranted given the circumstances.