1996 (10) TMI 264 - AT - Central Excise

Summary

Issues:
Contravention of Rule 57GG of the Central Excise Rules, 1944 leading to penalty imposition and cancellation of registration certificate.

Detailed Analysis:

Contravention of Rule 57GG and Penalty Imposition:
The case involved dealers in iron and steel products who were alleged to have contravened Rule 57GG of the Central Excise Rules, 1944 by not maintaining proper statutory accounts and issuing invoices incorrectly. The department issued a show cause notice for imposing penalties and canceling their registration certificates. The adjudicating authority imposed penalties and canceled the registration certificates. The Appellants argued that the show cause notice was vague and did not specify the extent of duty evasion. The learned Consultant contended that the cancellation of registration was unwarranted and violated their right to trade. However, the learned SDR argued that the Appellants admitted discrepancies between their records, leading to a clear contravention of Rule 57GG. The judge upheld the contravention of Rule 57GG, considering the potential Modvat loss and imposed penalties accordingly.

Cancellation of Registration Certificate:
The cancellation of registration certificates was challenged by the Appellants, arguing that it was unwarranted and violated their right to trade. The learned SDR defended the cancellation, stating that the Appellants caused Modvat loss, justifying the cancellation under Rule 174(11) of the Central Excise Rules, 1944. The judge examined the relevant provisions of Rule 174 and concluded that the cancellation of registration certificates could only be based on breaches of conditions related to the certificate itself, not on other provisions like Rule 57GG. As the allegations were specific to Rule 57GG and not related to the conditions of the registration certificate, the judge set aside the cancellation of the registration certificates.

In conclusion, the judge upheld the penalties imposed for contravention of Rule 57GG but set aside the cancellation of the registration certificates, emphasizing that revocation or suspension of a registration certificate must be based on breaches of conditions specific to the certificate itself. The appeals were disposed of accordingly.