1995 (3) TMI 281 - AT - Central Excise

Summary

Issues involved: The appeal challenges the Order-in-Original passed by the Collector of Central Excise, New Delhi regarding the manufacture and export of 'Leather Garments' without following prescribed procedures, leading to duty demand and penalty imposition.

Manufacture and Clearance of Goods: The appellants were charged with manufacturing 'Leather Garments' without obtaining a Central Excise License, issuing gate passes, maintaining proper records, or paying Central Excise duty. They argued that the goods were exported and could be cleared without duty payment under Rule 13 or with duty payment under Rule 12, which was refundable. The Collector confirmed duty of Rs. 81,00,624.69 and imposed a penalty of Rs. 4,00,000 for contravention of Central Excise Rules.

Export Procedures and Duty Demand: The appellants contended that the goods were exported, and any failure to follow procedures was technical, citing previous Tribunal decisions supporting this view. They argued that the goods were exempted before a certain date and that the Government had considered exempting them further. The appellants claimed that no duty was demandable due to mitigating circumstances and the lack of revenue loss.

Counter Arguments and Penalty Imposition: The Departmental Representative argued that the violations were not merely technical but gross, involving multiple offenses under the Central Excises & Salt Act. They stated that entitlement to rebate on exports required fulfilling specific conditions, which the party had not met. The Representative contended that penalty imposition was justified due to the contravention of excise laws.

Judgment: The Tribunal found that while duty demand was not justifiable as the goods were actually exported, penalty imposition was warranted but excessive. The penalty amount was reduced from Rs. 4,00,000 to Rs. 25,000, considering the gravity of the offense. The appeal was allowed with the reduced penalty amount.