1999 (10) TMI 508 - AT - Central Excise

Summary

Issues:
- Imposition of penalty for non-entry of alleged excess goods in RG 1 Register
- Applicability of Notification No.79/82 regarding processed fabrics
- Violation of statutory requirements under Rules 53 and 226
- Imposition of penalty on the manufacturer and the manager
- Consideration of written submissions in defense of the penalty imposed

Imposition of Penalty for Non-Entry of Alleged Excess Goods in RG 1 Register:
The appellant argued that since the goods found in excess were still in the factory and had not reached the state of removal, confiscation was not applicable. The Commissioner, in the impugned order, observed that the imposition of penalty should be based on whether the alleged excess goods were entered in the RG 1 Register. The appellant cited Notification No.79/82, stating that for processed fabrics, RG1 stage is reached only after folding and measurement. Referring to a previous Tribunal decision, the appellant contended that non-maintenance of records was not established, and penalty was set aside in a similar case. The Tribunal found merit in the appellant's argument, leading to the setting aside of the penalty.

Applicability of Notification No.79/82 Regarding Processed Fabrics:
The appellant highlighted that the RG 1 entries for processed fabrics are required only after folding and measurement, as per Notification No.79/82. The appellant presented a trade notice indicating the stage for MM Fabrics to be when fabrics are processed and duly folded but before packing. The Tribunal noted that the Department did not dispute the applicability of the notification to the disputed items. Consequently, the Tribunal agreed with the appellant that non-maintenance of records under Rules 53 and 226 was not established in the present case, leading to the reversal of the penalty imposed.

Violation of Statutory Requirements Under Rules 53 and 226:
The Commissioner found that the appellants violated statutory requirements under Rules 53 and 226 by not entering production in the RG 1 Register at the appropriate stage. The Assistant Commissioner had imposed penalties on both the manufacturer and the manager under Rule 209A of the Central Excise Rules. However, the Tribunal, after considering the submissions and relevant notifications, concluded that the charge of non-maintenance of records was not applicable, and therefore, the penalty imposed could not be sustained.

Imposition of Penalty on the Manufacturer and the Manager:
The Order-in-Original revealed that penalties were imposed on both the manufacturer and the manager. Despite the rejection of the manufacturer's appeal and subsequent filings, the penalty on the manager (the present appellant) was also being contested. The Tribunal, after thorough examination of the submissions and relevant notifications, determined that the penalty imposed on the appellant could not be justified, leading to the allowance of the appeal and the setting aside of the penalty amounting to Rs.10,000.

This detailed analysis of the judgment showcases the key arguments, legal interpretations, and findings that led to the reversal of the penalty imposed on the appellant.