1999 (12) TMI 395 - AT - Central Excise

Summary

Issues:
- Allegation of goods kept without entry in RG-1 Register for clandestine removal
- Confiscation of ABS Polymers and penalty imposition under Rule 173Q
- Arguments regarding intention behind keeping goods in bagging section
- Comparison with previous tribunal decisions on similar cases
- Dispute over penalty amount imposed

Analysis:
1. The appeal challenged an order confirming the confiscation of 199 bags of ABS Polymers valued at Rs. 3,23,375 under Rule 173Q(1)(b) due to the absence of entry in the RG-1 Register, with a redemption fine and penalty imposed by the Deputy Commissioner. The appellant's counsel argued that the goods were kept in the bagging section for future use against specific orders and not for clandestine removal, supported by explanations given to the officers and a tabulated statement submitted during the show cause notice (SCN) response.

2. The appellant's counsel emphasized that the goods were not intended for clandestine removal as they were still in the premises, citing previous tribunal decisions where confiscation was set aside when goods were found in the factory without proper entry in the RG-1 Register. The argument focused on the absence of evidence indicating an attempt to evade duty payment, leading to a call for a reduced penalty rather than confiscation.

3. The Joint Director of Revenue (JDR) contended that the failure to account for the goods in the RG-1 Register warranted confiscation and penalty, based on the appellant's admission of non-entry. However, the presiding judge found merit in the appellant's argument, noting the lack of evidence supporting clandestine removal given the extended period the goods were kept in the bagging section.

4. While acknowledging the failure to account for production in the RG-1 Register, the judge upheld the imposition of a penalty but reduced it from Rs. 50,000 to Rs. 10,000 considering the circumstances and previous tribunal decisions where token penalties were deemed appropriate. Consequently, the order of confiscation and redemption fine was set aside, and the penalty amount was reduced.

5. In conclusion, the appeal was allowed with the penalty reduced to Rs. 10,000, and the appellants were entitled to any consequential benefits as per the law. The judgment highlighted the importance of proper documentation and the lack of evidence supporting the allegation of clandestine removal in this case, leading to a favorable outcome for the appellant.