1998 (10) TMI 266 - AT - Central Excise

Issues Involved:
1. Confiscation of goods and redemption fine
2. Duty demand on short-accounted goods
3. Penalty imposed on the appellant
4. Allegation of misdeclaration and removal of goods without payment of duty
5. Demand of duty based on transport documents (GRs)

Issue-wise Detailed Analysis:

1. Confiscation of Goods and Redemption Fine:
The appeal challenges the Order-in-Original dated 22-2-1990 by the Additional Collector, Central Excise, Chandigarh, which ordered the confiscation of goods valued at Rs. 16,26,159/-. The goods had been provisionally released to the appellant, and it was held that they should be deemed to have been redeemed on payment of a redemption fine of Rs. 50,000/-. This amount was appropriated against the security deposited under the B-11 Bond executed by the appellant. The adjudicating authority also directed the duty on the confiscated goods to be paid after accounting for them in the statutory records.

2. Duty Demand on Short-Accounted Goods:
The Additional Collector demanded a duty of Rs. 3,28,275.76 for goods short-accounted and removed without payment of duty. The appellant contended that the goods found in the outside premises should be set off against the alleged shortage of finished goods in the factory premises. The adjudicating authority found shortages of 14,653.937 kgs of finished goods and 39,841.444 kgs of raw materials. The appellant argued that these shortages should be accounted for by the goods found in the outside premises and the scrap found in stock.

3. Penalty Imposed on the Appellant:
A penalty of Rupees one lakh was imposed on the appellant. The appellant argued that there was no attempt to evade duty and that the goods were stored in an unlicensed premises due to a shortage of space in the factory. The adjudicating authority, however, held that the unaccounted raw materials had been used to manufacture products removed without payment of duty.

4. Allegation of Misdeclaration and Removal of Goods Without Payment of Duty:
The appellant was accused of removing self-tapping screws by misdeclaring them as M-screws, Iron Screws, or simply screws with a lower value during 1987-88 and 1988-89. The appellant contended there was no evidence to justify this finding and that no investigation had been done with customers to establish excess supply. The Departmental Representative supported the adjudicating authority's order, stating it was based on the scrutiny of records and the Managing Director's admission.

5. Demand of Duty Based on Transport Documents (GRs):
The adjudicating authority found that the weight of consignments shown in the GRs issued by transport companies was greater than the weight shown in the clearance documents. The appellant argued that the weights in the GRs included the weight of wooden cases and packing materials, which did not reflect the actual quantity of screws supplied. The Tribunal found that the application of a uniform rate of Rs. 27 per kg was incorrect and that the matter required remand for proper examination and quantification.

Conclusion:
The Tribunal accepted the appellant's plea regarding the shortages in the factory being accounted for by the goods found in the outside premises. The demands of duty of Rs. 70,778.51 and Rs. 62,835.09 were set aside. The Tribunal also found that the adjudicating authority had not properly quantified the demand amount and remanded the matter for de novo examination and proper quantification after granting further opportunity of personal hearing to the appellant.

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