2000 (1) TMI 360 - AT - Central Excise

Summary

Issues:
1. Appeal against decision of Commissioner of Customs (Appeals) regarding confiscation of goods.
2. Allegation of non-accountal leading to excess stock of finished goods.
3. Justification for penalty imposition by Additional Commissioner.
4. Arguments presented by both parties regarding confiscation and penalty imposition.
5. Applicability of case law cited by the appellant in support of their case.
6. Reduction of penalty amount by the judge.

Analysis:
1. The appeal was filed by the appellants against the decision of the Commissioner of Customs (Appeals) concerning the confiscation of goods. The Commissioner had set aside the order of confiscation but upheld the duty payment on excisable goods after proper accounting and at the stage of removal from the factory.

2. Central Excise Officers discovered an excess stock of finished goods during a surprise visit to the factory premises of the appellants. The officers found discrepancies in the stock records, leading to an excess stock on which duty amounting to Rs. 1,15,649/- was involved. The excess goods were seized, and the appellants were asked to explain why the goods should not be confiscated and why a penalty should not be imposed.

3. The Additional Commissioner imposed a penalty of Rs. 75,000/- after considering the appellants' submissions. The penalty was justified based on the large quantity of unrecorded goods in stock, indicating a potential for clandestine removal. The Additional Commissioner argued that the penalty amount was nominal considering the value of the goods.

4. The appellant's representative argued against the confiscation and penalty imposition, stating that the only allegation was non-accountal, which was a technical error. Citing relevant case law, the representative emphasized that penalty imposition should not occur without suppression, clandestine removal, or mala fide intention.

5. The judge analyzed the case law cited by the appellants and found that the facts of the present case differed from those in the cited cases. The judge noted discrepancies in the production reports and lack of evidence to cover the excess finished goods. The judge differentiated the circumstances of the present case from the cases cited by the appellants.

6. After considering the evidence and submissions, the judge reduced the penalty amount from Rs. 75,000/- to Rs. 10,000/-, deeming the original penalty to be on the higher side. The reduction was based on the totality of the facts and circumstances of the case, indicating a more reasonable penalty amount in light of the situation.