2000 (9) TMI 750 - AT - Central Excise

Summary

Issues:
1. Duty demand on electric fans
2. Confiscation of electric fans
3. Personal penalties imposed

Analysis:

1. Duty Demand on Electric Fans:
The case involved a duty demand of Rs. 25,92,335.75 on 39490 electric fans, alleged to have been cleared without payment of duty under the guise of repaired goods. The appellants contended that they followed the prescribed procedure under Rule 173H of the Central Excise Rules for receiving defective fans, repairing them, and clearing them after removing defects. The appellants maintained detailed records of the repair process, including the parts replaced and duty paid on them. The Tribunal referred to a precedent where it was held that repairing old and defective fans does not amount to manufacturing new goods. Considering the evidence presented, the Tribunal found that the demand was not sustainable, as the appellants adhered to the prescribed procedure and did not manufacture new goods.

2. Confiscation of Electric Fans:
Regarding the confiscation of 467 electric fans, the appellants claimed that these fans were cleared from the finishing room, and any excess was due to an equal number of fans being removed earlier for urgent reasons. The revenue authorities contended that the fans were in excess of the records without a valid explanation. The Tribunal found that the appellants' explanation lacked merit as the excess fans were found without proper entry in the records. Consequently, the Tribunal upheld the confiscation of the 467 fans.

3. Personal Penalties Imposed:
Personal penalties were imposed on individuals under Rule 209A of the Central Excise Rules for alleged acts of omission and commission in dealing with excisable goods. However, the adjudicating authority did not provide specific instances attributing to evasion of central excise duty by the individuals. As a result, the Tribunal set aside the penalties imposed on the individuals, finding them not sustainable. The penalty imposed on the company was reduced based on the circumstances of the case. Therefore, the penalties on the individuals were set aside, and the penalty on the company was reduced to Rs. 50,000.

In conclusion, the Tribunal partially allowed the appeal filed by the company and allowed the appeals filed by the individuals, setting aside the penalties imposed on them.