2000 (3) TMI 725 - AT - Central Excise

Summary

Issues Involved:
1. Confiscation and fine of metal containers.
2. Demand of Central Excise Duty on metal containers found short.
3. Confiscation and fine of tin scrap.
4. Confiscation and fine of tin sheets.
5. Demand of Central Excise Duty on tin sheets found short.
6. Imposition of penalties on the company and individuals.

Issue-wise Detailed Analysis:

1. Confiscation and Fine of Metal Containers:
The ld. Collector ordered the confiscation of 17076 metal containers and imposed a fine of Rs. 10,000/- in lieu of confiscation. Upon appeal, it was argued that the excess containers were either produced on the day of the inspection or were undergoing leak tests and quality checks, hence not yet recorded in the RG.I Register. The Tribunal found the appellant's explanation plausible, noting that the containers required leak tests before becoming marketable. Consequently, the Tribunal set aside the fine in lieu of confiscation for these containers.

2. Demand of Central Excise Duty on Metal Containers Found Short:
The ld. Collector confirmed the demand of Central Excise Duty of Rs. 2180.62 on 2363 metal containers found short. The appellant argued that the shortage was negligible and unintentional. However, the Tribunal held that the explanation was insufficient and upheld the duty demand, emphasizing that every shortage must be adequately explained.

3. Confiscation and Fine of Tin Scrap:
The ld. Collector ordered the confiscation of 88.644 M.T. of tin scrap and imposed a fine of Rs. 50,000/-. The appellant contended that the tin scrap was process waste and not subject to duty as per Rule 57D(1) of the Central Excise Rules. The Tribunal found that since Modvat credit was taken on the tin sheets, the scrap generated was dutiable and should have been accounted for. However, the Tribunal reduced the fine from Rs. 50,000/- to Rs. 25,000/-.

4. Confiscation and Fine of Tin Sheets:
The ld. Collector ordered the confiscation of 389.540 M.T. of tin sheets and imposed a fine of Rs. 10 lakhs. The appellant argued that the tin sheets were moved to their Delhi godown due to labor trouble without any intent to evade duty. The Tribunal held that the removal without proper permission was illegal, thus upholding the confiscation but reducing the fine to Rs. 7 lakhs.

5. Demand of Central Excise Duty on Tin Sheets Found Short:
The ld. Collector demanded Central Excise Duty of Rs. 4,44,609 on 436.534 M.T. of tin sheets found short. The Tribunal set aside the duty demand on 389.540 M.T. of tin sheets moved to the Delhi godown, ruling it as part of the consignment shifted. However, the duty on the remaining 46.994 M.T. of tin sheets found short in the factory was confirmed and directed to be recalculated by the Asstt. Collector.

6. Imposition of Penalties on the Company and Individuals:
The ld. Collector imposed a penalty of Rs. 5 lakhs on the company and personal penalties of Rs. 20,000/- each on two individuals and Rs. 5,000/- on another individual. The Tribunal found the penalty on the company to be excessive and reduced it to Rs. 2.5 lakhs, considering the overall facts and circumstances of the case.

Conclusion:
The Tribunal modified the impugned order by setting aside the fine on the metal containers found in excess, reducing fines on tin scrap and tin sheets, setting aside a portion of the duty demand on tin sheets, and reducing the penalty on the company. The appeal and the Misc. application were disposed of accordingly.