2000 (5) TMI 294 - AT - Central Excise

Summary

Issues:
Shortage of tractor and crane rims found during inspection, Alleged removal of goods without payment of Central Excise duty, Imposition of duty and penalty by lower authorities, Appeal against the order of Commissioner (Appeals).

Analysis:
The case involved a dispute regarding the shortage of tractor and crane rims found during an inspection by Central Excise Officers at the appellants' premises. The officers alleged that the goods were removed clandestinely without payment of Central Excise duty, leading to the proposal of confirming the duty and imposing a penalty on the appellants. The jurisdictional Assistant Commissioner confirmed the duty demand and penalty, which was upheld by the Commissioner (Appeals), prompting the present appeal.

Upon careful examination of the orders and submissions, the appellants argued that the visiting officers did not consider their explanation provided through a fax message and subsequent letter, claiming the rims were actually in the factory for painting and subsequent supply. They contended that a physical verification should have been conducted to verify their claims, citing a Tribunal decision in a similar case. The Department, however, emphasized that the shortage was admitted by the appellants, and the attention was not drawn to the alleged location of the rims during the inspection.

The Tribunal noted that while the shortage was accepted by the appellants, their defense rested on the goods being in the factory for painting before removal. The Tribunal observed that the partner who sent the explanation was aware of Central Excise matters, as evidenced by debiting the duty amount. However, the lack of an affidavit from the partner and the absence of a clear explanation for the unpainted rims in the records weakened the appellants' case. The Tribunal distinguished a previous case where reverification was conducted promptly, unlike in the present situation where further processing could have occurred.

Ultimately, the Tribunal upheld the duty demand but set aside the penalty imposed by the lower authorities. The Tribunal found the penalty unreasonable as the irregularity did not amount to a serious offense, and no violation of rules apart from Rule 53 was established. Therefore, the penalty was deemed unjustified, leading to its cancellation.

In conclusion, the Tribunal disposed of the appeal by confirming the duty demand but setting aside the imposed penalty due to lack of sufficient grounds for its imposition.