1996 (7) TMI 379 - AT - Central Excise

Summary

Issues:
Penalty imposed for failure to maintain statutory records correctly.

Analysis:
The appeal was against the penalty imposed by the Collector of Central Excise, Chandigarh on the appellants for not maintaining statutory records correctly. The appellants were manufacturing excisable products from common inputs and were allowed to maintain combined accounts of the inputs as per Trade Notice No. 43/86-C.E. The Collector imposed a penalty of Rs. 50,000 on the appellants despite accepting that the private accounts of the manufacturers reflected the stock position. The appellants argued that they operated within the parameters of the trade notice and there was no violation of Rule 57G. They claimed that the penalty was unjustified in the absence of mala fides on their part.

The Counsel for the appellants argued that the Collector had acknowledged in the adjudication order that the appellants complied with the trade notice requirements. The Collector's belief that statutory records were not properly maintained was disputed. It was contended that since the appellants maintained their own accounts as required, there was no justification for the penalty. On the other hand, the JDR argued that the penalty was correctly imposed due to the failure to maintain statutory records.

Upon careful consideration of the submissions and relevant documents, the Tribunal found that the appellants were availing procedural relaxation under the trade notice. The Collector's order indicated that the appellants had not breached the trade notice provisions. It was noted that the appellants had written records as per the trade notice requirements, even though there was a technical flaw in not reflecting daily entries in the RG-23A Part I register. The Tribunal concluded that the penalty imposed by the Collector was not justified as there were no other grounds for sustaining it. The order imposing the penalty was set aside, and the appeal was allowed.