1999 (9) TMI 366 - AT - Central Excise

Summary

Issues:
Manufacture and clearance of computers without payment of central excise duty, Confiscation and redemption fine on seized computers, Imposition of penalty, Allegation of violation of principles of natural justice.

Manufacture and Clearance of Computers without Payment of Duty:
The appellants filed an appeal against an order-in-original confirming a demand of central excise duty on computers manufactured and cleared without payment of duty. The officers found that the appellants were engaged in manufacturing computers and cleared them without paying duty. Statements from various individuals confirmed the manufacturing and assembly of computers at the appellants' premises. The appellants contended that the computers were manufactured through job workers, but only two out of four named engineers were produced, who later admitted that the computers were assembled at the appellants' premises. The appellants requested cross-examination of witnesses, which was denied. The Tribunal found no infirmity in confirming the duty demand on the manufactured computers.

Confiscation and Redemption Fine on Seized Computers:
Two computers seized from the appellants' premises were ordered to be confiscated with an option to redeem them on payment of a fine. The redemption fine initially set at Rs. 20,000/- was reduced to Rs. 10,000/-. The Tribunal upheld this aspect of the impugned order.

Imposition of Penalty:
A penalty of Rs. 40,000/- was imposed on the appellants. The Tribunal reduced this penalty to Rs. 10,000/- considering the facts and circumstances of the case. The impugned order was upheld in this regard.

Allegation of Violation of Principles of Natural Justice:
The appellants alleged a violation of principles of natural justice, claiming that they were not allowed to cross-examine witnesses and that a voluminous record taken from their premises was not returned. The Tribunal found that the denial of cross-examination of individuals who admitted to assembling computers at the appellants' premises was not a violation of natural justice, given the initial admissions made by the manager and owner of the appellants' firm. The appeal was disposed of with the reduction of the redemption fine and penalty, while upholding the impugned order in all other aspects.