1996 (5) TMI 272 - AT - Central Excise

Confiscation and redemption fine - Clandestine removal - Remand when finding not given - Demand

Summary

Issues Involved:
1. Confiscation of 1002 pairs of shoes.
2. Demand of Central Excise duty amounting to Rs. 2,33,351.15.
3. Imposition of penalty on the appellant.

Issue-wise Detailed Analysis:

1. Confiscation of 1002 pairs of shoes:

The main contention of the appellants was that all necessary documents for transporting the goods were prepared, but the duty was not debited in the proper register due to the illness of their Accountant. The Tribunal noted that the duty for the seized goods was paid only when they were re-dispatched on 14-10-1992. Under Rule 9 of the Central Excise Rules, excisable goods can be removed only after the duty is paid. The appellants failed to make the necessary debit entry in the account current before removing the goods, thus violating Rule 9. The Tribunal held that the confiscation of the goods was proper but reduced the redemption fine to Rs. 1,00,000/- considering the circumstances.

2. Demand of Central Excise duty amounting to Rs. 2,33,351.15:

The Tribunal examined the reconciliation of factory stock with the RG 1 Register. The opening balance as on 19-9-1992 for Ultimo shoes was incorrectly recorded as 2500 pairs instead of 2218.5 pairs. The appellants had provided a reconciliation statement explaining the alleged shortage of 501 pairs of Ultimo shoes and 1067 pairs of Match-II shoes, stating that the entries were made twice in the RG 1 Register. The adjudicating authority failed to verify the reconciliation statement and did not provide a detailed analysis. The Tribunal held that the demand of duty was not in accordance with law and remanded the matter for re-evaluation, instructing the adjudicating authority to consider the reconciliation statement and provide a reasoned order.

3. Imposition of penalty on the appellant:

The Tribunal noted that penalty is imposable under Rule 173Q(ii) for contravening the rules. However, the imposition of penalty for clandestine removal depends on whether the clandestine removal is established. Since the matter regarding the alleged clandestine removal was remanded for re-evaluation, the Tribunal left the decision on the imposition of penalty to the adjudicating officer, based on the findings in the de novo adjudication.

Conclusion:

The Tribunal upheld the confiscation of the 1002 pairs of shoes but reduced the redemption fine to Rs. 1,00,000/-. The demand for Central Excise duty was found to be improperly assessed due to lack of verification of the reconciliation statement, and the matter was remanded for re-evaluation. The imposition of penalty was also left to be determined based on the findings of the re-evaluation regarding clandestine removal.