1997 (6) TMI 216 - AT - Central Excise

Summary

Issues: Appeal against Order-in-Original, Contravention of Central Excise Rules, Confiscation of Goods, Imposition of Penalty, Reduction of Redemption Fine and Penalty, Interpretation of Rule 173Q.

Analysis:
1. The appellant filed an appeal against Order-in-Original No. 161/CE/PPL/MRD/93, alleging contravention of Rule 53 and 173Q of the Central Excise Rules, 1944. The Officer found finished goods worth Rs. 19,24,135/- with excise duty of Rs. 3,17,481/- in excess of entries in the RG 1 Register, leading to a Show Cause Notice. The Deputy Collector of Central Excise passed an order confiscating the goods and imposing a redemption fine of Rs. 1,50,000/- and a personal penalty of Rs. 50,000. The Collector (Appeals) reduced the redemption fine to Rs. 75,000/- and the penalty to Rs. 25,000/-.

2. The appellant's counsel argued that the goods were not at the RG 1 stage, emphasizing that certain items were yet to be fitted in the machinery. They contended that the goods were tailor-made and not fully finished. Despite these submissions in response to the Show Cause Notice, the authorities did not consider these arguments.

3. The respondent's representative highlighted that the goods were found fully finished and not entered in the RG 1 Register. The Dy. Manager Accounts confirmed this in a statement and did not retract it. The appellant's argument that the goods were not fully finished was dismissed by the authorities.

4. The Tribunal observed that the goods worth Rs. 19,24,135/- with excise duty of Rs. 3,17,481/- were seized as fully finished and unaccounted for in the RG 1 Register. The appellant's claim that the goods were not fully finished was contradicted by the statement of the Dy. Manager Accounts. The authorities also noted that control panels had been lying unaccounted for in the factory for two years.

5. The Tribunal referenced the decision of the Andhra Pradesh High Court and previous Tribunal judgments, stating that goods can only be confiscated under Rule 173Q(A) when removed from the factory in contravention of any rule. As there was no evidence of goods being removed without duty payment, the confiscation was not justified.

6. Consequently, the Tribunal set aside the order of confiscation and redemption on payment of fine. The personal penalty was reduced to Rs. 10,000 for non-maintenance of statutory records under Rule 173Q and Rule 53 of the Central Excise Rules. The appellant was granted any consequential relief as per the law, and the appeal was disposed of accordingly.