1995 (1) TMI 217 - AT - Central Excise

Summary

Issues: Seizure of goods for non-production of gate pass, confiscation of cartons and van, imposition of penalty, appeal against orders of lower authorities, claim of goods not removed from factory, defective goods destroyed, contravention of rules, intention to evade duty, remittance of penalty.

In this case, the Appellate Tribunal CEGAT, New Delhi, heard an appeal regarding the seizure of goods at a factory and subsequent confiscation and penalty imposition. The Central Excise officers found a van loaded with 720 cartons of drinks parked near the factory gate without a gate pass. Additionally, 90 cartons of drinks were seized for not being entered in the RG Register. The Assistant Collector of Central Excise confiscated the cartons and van but allowed redemption on payment of duty and imposed a penalty. In the appeal, the Collector (Appeals) reduced the redemption fine but upheld the penalty. The appellant argued that the 720 cartons were not removed from the factory and were loaded in the van by mistake. The driver and the General Manager's statements supported this claim, indicating no deliberate attempt to evade duty. The Tribunal agreed that since the cartons were not removed from the factory, confiscation was not justified.

Regarding the remaining 90 cartons, the appellant claimed they were defective and destroyed due to leakage issues. The goods were not entered in the RG-1 Register as they were kept for observation. The Tribunal noted that despite being defective, the goods were manufactured and should have been accounted for in the register. However, there was no evidence of an intention to evade duty, leading to the remittance of the penalty. Citing relevant case laws, the Tribunal emphasized that in cases without deliberate intent to evade duty, penalties should not be imposed. Thus, the appeal was allowed in full, remitting the penalty entirely based on the lack of deliberate evasion and the destruction of the defective goods after manufacture.