1995 (6) TMI 109 - AT - Central Excise

Summary

Issues:
1. Determination of weight based on average weight of ingots.
2. Legality of confiscation and penalty imposed.
3. Industry practice of maintaining records based on averages.
4. Estoppel in law regarding duty determination.
5. Justification for confiscation and penalty reduction.

Analysis:

The case involves a dispute regarding the determination of weight based on the average weight of ingots seized from the factory premises of the respondents. The Central Excise officers seized a quantity of ingots due to a discrepancy in the recorded balance and the actual weight. The Assistant Collector ordered the confiscation of the excess ingots and imposed a penalty on the respondents, which was challenged before the Appellate Tribunal.

The main contention raised by the Appellant was that the determination of weight based on the average weight of ingots was done with the consent of the assessee and was a common industry practice due to the uniformity in size and dimension of the ingots produced. On the other hand, the Respondent argued that duty payment must be made under the authority of law and cited legal precedents to support the argument that average weight cannot be the basis for determining duty.

The Tribunal noted that each ingot was not of the same weight, contrary to the Appellant's claim of uniformity due to being cast in molds of the same size. However, it was observed that the industry practice was to maintain records based on averages, as stated in the reply to the show cause notice. The Tribunal emphasized that it is common in industries to use averages for practical reasons when handling goods in bulk.

The Tribunal opined that the method of determination of weight based on averages was not incorrect, especially since it was mutually agreed upon and in line with industry practices. While acknowledging the need for accurate weighment to avoid disputes, the Tribunal upheld the confiscation but reduced the penalty imposed on the respondents considering the absence of evidence of under-declaration to evade duty.

In conclusion, the Tribunal upheld the confiscation of the excess ingots but reduced the redemption fine imposed on the respondents, emphasizing the industry practice of maintaining records based on averages and the practical challenges in weighing each unit individually.