2001 (2) TMI 472 - AT - Central Excise

Summary

Issues involved:
1. Imposition of penalty for clearing excisable goods without debiting the PLA.
2. Challenge against the quantum of redemption fine fixed by the Adjudicating Authority for redeeming confiscated goods.

Analysis:

Issue 1: Imposition of penalty for clearing excisable goods without debiting the PLA

The appeal involved the question of whether penalty is imposable when excisable goods are cleared under invoices without debiting the PLA. The appellant, represented by Shri K.K. Anand, argued that there was no mala fide intention to evade duty payment as they had mentioned the PLA debit entry number on the invoice. It was explained that due to clerical errors and staff shortage, the duty was not debited immediately but was done later against the PLA entry. The appellant contended that penalty under Section 11AC of the Central Excise Act should not apply in the absence of fraudulent intent. On the other hand, Shri A.K. Jain, representing the respondent, argued that the goods were removed without payment of duty, constituting a violation of Rule 9 of the Central Excise Rules. Reference was made to a previous case where the Tribunal held that sufficient balance in the PLA does not validate clearances without proper details.

The judgment analyzed both arguments and concluded that while there was no evidence of fraud or wilful misstatement, the goods were indeed cleared without debiting the duty amount in the PLA. Therefore, a penalty under Rule 173Q was deemed applicable. However, considering the circumstances, a reduced penalty of Rs. 5,000 was imposed. The judgment cited precedents where penalties were reduced based on similar considerations. It was noted that the availability of sufficient balance in the PLA could be a factor in determining penalties for rule violations. The Tribunal also acknowledged that the goods were cleared to a Central Government Undertaking where proper accounting was maintained, leading to the decision to impose a token redemption fine of Rs. 6,000. The appeal was partially allowed based on these findings.

Issue 2: Challenge against the quantum of redemption fine

The appellants had challenged the quantum of redemption fine fixed by the Adjudicating Authority for redeeming the confiscated goods. The judgment addressed this challenge by reducing the redemption fine from the original amount to Rs. 6,000, considering factors such as the destination of the goods and the proper accounting at the Central Warehousing Corporation. This decision was made to ensure that the penalty was proportionate and fair in the circumstances of the case.

In conclusion, the judgment provided a balanced approach by imposing a reduced penalty and redemption fine based on the specific details and arguments presented by both parties, ultimately allowing the appeal in part.