1998 (10) TMI 241 - AT - Central Excise

Summary

Issues:
1. Appeal against Order-in-Original passed by Additional Collector of Central Excise, Bombay.
2. Confiscation of recovered octanol and duty demand.
3. Imposition of penalty on the appellants.
4. Modvat credit reversal and shortage of 2-Ethyl Hexanol.

Analysis:

1. Appeal against Order-in-Original:
The Appellants appealed against the Order-in-Original passed by the Additional Collector of Central Excise, Bombay. The Appellants requested to decide the matter on merits. The Central Excise Officers intercepted a lorry containing recovered octanol, leading to the discovery of irregularities in the clearance of goods from the appellants' premises without payment of duty. The officers seized the drums and lorry for further action under Central Excise law.

2. Confiscation and Duty Demand:
The Additional Commissioner confiscated the recovered octanol drums and imposed a fine for redemption. Additionally, he confirmed the Central Excise duty demand for clearances made during a specific period. The Appellants contended that the failed batches were waste products and not excisable, citing legal precedents. However, the Department argued that the product was organic and classifiable under the Central Excise Tariff Act. The Tribunal upheld the duty demand and confiscation, finding no evidence to support the waste product claim.

3. Imposition of Penalty:
The Additional Commissioner imposed a penalty on the Appellants for various violations, including failure to inform Excise Officers about recovered octanol production. The Tribunal upheld the penalty, considering the gravity of the violations and the Appellants' actions. The imposed penalty amount was deemed appropriate given the circumstances and the amount of goods cleared without duty payment.

4. Modvat Credit Reversal and 2-Ethyl Hexanol Shortage:
Regarding Modvat credit reversal and the shortage of 2-Ethyl Hexanol, the Additional Commissioner directed further investigation by the Divisional Assistant Commissioner. The Tribunal found no issue with this instruction, emphasizing the need for appropriate action based on the shortage of raw materials. The Tribunal concluded that there was no reason to interfere with the impugned order, rejecting the appeal filed by the Appellants.

Overall, the Tribunal upheld the duty demand, confiscation, penalty imposition, and further investigation into Modvat credit reversal and raw material shortage, based on the findings and circumstances presented in the case.