1997 (10) TMI 175 - AT - Central Excise

Aluminium scrap - Benefit of Notification No. 217/86-C.E. - Demand - Clandestine removal - Confiscation

Summary

Issues:
1. Duty demand on aluminium scrap and iron and steel scrap.
2. Confiscation of seized goods.
3. Imposition of penalty.
4. Eligibility for Notification 217/86 benefit.
5. Non-accountal of aluminium castings.
6. Reduction of penalty.
7. Barred by limitation.

Analysis:
1. The appeal involved a duty demand on aluminium scrap and iron and steel scrap, along with the confiscation of seized goods and imposition of a penalty. The Collector of Central Excise confirmed a duty demand on aluminium scrap, iron and steel scrap, and confiscated aluminium castings due to non-accounting in statutory records, with an option to redeem on payment of a fine and imposing a penalty on the appellant.

2. The case revolved around the unaccounted finished aluminium castings found during a visit to the factory, along with unaccounted scrap generated in the appellant's unit. The appellants were also found to have moved semi-finished goods without permission. The statement of the Manager confirmed that goods were registered in the RG 1 register at clearance, and unaccounted items were not entered elsewhere.

3. A show cause notice was issued proposing duty levy, confiscation, and penalty, which were confirmed by the Adjudicating authority, leading to the appeal.

4. The duty demand on aluminium scrap was contested based on Notification 217/86 eligibility. The Adjudicating authority was directed to reexamine the plea for the benefit of the notification as the appellants had not claimed it before.

5. The demand for duty on iron and steel scrap was upheld as the appellants' belief that it was not liable to duty lacked a legal basis or circular supporting such exemption.

6. The non-accounting of aluminium castings was explained as intermediate goods, but the presence of finished castings led to the rejection of this argument. The confiscation of the unaccounted aluminium scrap was upheld based on the Central Excise Rules.

7. The penalty was reduced due to the setting aside of the duty demand on aluminium scrap, aligning with the reduced financial liability.

8. The argument of being barred by limitation was dismissed as the appellants failed to disclose the production and clearance of scrap without duty payment, leading to a case of wilful suppression and allowing the extended period of limitation under the Central Excises Act.

9. The appeal was disposed of based on the above analysis, addressing each issue comprehensively.