2000 (10) TMI 601 - AT - Central Excise

Summary

Issues:
1. Alleged clandestine removal of imported glass neck tubes.
2. Confiscation of finished goods and modvatable inputs.
3. Imposition of penalty under Customs Act and Central Excise Act.

Issue 1: Alleged Clandestine Removal of Imported Glass Neck Tubes

The case involved M/s. Tosha International Limited, engaged in manufacturing picture tubes, importing glass neck tubes under concessional customs duty. The Customs Department alleged that M/s. Tosha International clandestinely removed imported glass neck tubes without paying customs duty. The department seized the goods and issued a show cause notice (SCN) for confiscation, duty payment, and penalty imposition. M/s. Tosha International claimed they intended to use the tubes for manufacturing but later decided to sell them due to factory closure. They deposited differential duty and argued against confiscation under Section 111(o). The Additional Commissioner confiscated the goods, imposed penalties, and allowed redemption on fines.

Issue 2: Confiscation of Finished Goods and Modvatable Inputs

The Additional Commissioner confiscated finished goods and modvatable inputs, alleging unaccounted finished goods and incorrect valuation of materials in the factory. M/s. Tosha International argued that the goods were kept for checks, not for clandestine removal, and disputed the valuation of materials. The Commissioner imposed fines for redemption and confirmed the duty demand. M/s. Tosha International appealed against the confiscation and penalties imposed.

Issue 3: Imposition of Penalty under Customs Act and Central Excise Act

M/s. Tosha International challenged the penalties imposed under the Customs Act and Central Excise Act. They argued that the adjudicating officer exceeded jurisdiction by adjudicating on customs matters. The appellants contended that penalties were harsh, and the closure of the factory led to non-compliance with record-keeping requirements. The Customs Department defended the penalties, citing violations of Notification No. 64/95-Cus. and non-accountal of goods. The Tribunal reduced the quantum of redemption fines but found the penalty imposition lacking apportionment under different acts. The penalty on M/s. Essex Marketing was set aside due to lack of evidence of knowledge about the goods' clearance at concessional rates.

In conclusion, the Appellate Tribunal upheld the confiscation of seized and detained goods due to non-accountal and upheld the confiscation of detained goods as per legal precedents. The Tribunal reduced the redemption fines but found the penalty imposition lacking proper apportionment under different acts. The penalty on M/s. Essex Marketing was set aside due to insufficient evidence. The appeals were disposed of accordingly.