2001 (7) TMI 565 - AT - Central Excise

Summary

Issues:
1. Confiscation of excess finished goods and raw material with redemption option.
2. Imposition of penalty under Rule 226 for non-accountal of goods in statutory records.

Detailed Analysis:
Issue 1: The appeal was filed against the impugned order affirming the confiscation of excess finished goods and raw material with an option for redemption upon payment. The appellants, engaged in manufacturing M.S. Sheets, nuts, bolts, etc., had unaccounted raw material and finished goods in their factory premises. The Deputy Commissioner ordered confiscation and imposed penalties, a decision upheld by the Commissioner (Appeals). However, upon review, it was found that there was no evidence of clandestine removal of goods, only non-accountal in statutory records. The Tribunal noted that penal provisions under Rule 173-Q could not be invoked as there was no attempt at illegal removal. Citing precedent, the Tribunal held that penal actions must be construed strictly, favoring the assessee unless compelled otherwise by the language of the law. Consequently, the order confirming confiscation was set aside as it could not be legally sustained.

Issue 2: The penalty imposed on the appellants under Rule 226 for non-accountal of goods in statutory records was also reviewed. While the Commissioner (Appeals) had upheld a penalty of Rs. 50,000, the Tribunal noted that the maximum penalty under Rule 226 was Rs. 2000. Therefore, the penalty was reduced to Rs. 2000 only. The Tribunal partially allowed the appeal, setting aside the confiscation order and modifying the penalty imposed. The decision was based on the strict interpretation of penal provisions and the absence of evidence supporting illegal removal of goods. The Tribunal's ruling aimed to align with legal precedents and statutory provisions, ensuring fair treatment of the appellants in the case.