2001 (4) TMI 560 - AT - Central Excise

Summary

Issues Involved:
1. Confiscation of nylon fabric bags and other goods under Rule 173Q of the Central Excise Rules.
2. Imposition of penalty on the appellants.
3. Non-entry of goods in RG 1 register.
4. Liability of goods meant for export.
5. Personal liability of Shri Tarun Oberoi.
6. Liability of M/s. Reebok India Company under Rule 209A.

Detailed Analysis:

1. Confiscation of Nylon Fabric Bags and Other Goods:
The core issue in these appeals was whether the seized goods bearing brand names "Reebok" and "Levis" were liable to confiscation under Rule 173Q of the Central Excise Rules. The goods were seized from various locations, including a tempo and factory premises. The Tribunal upheld the confiscation, stating that the goods were cleared without payment of duty, making them liable for confiscation under Rule 173Q.

2. Imposition of Penalty on the Appellants:
The Tribunal examined the penalties imposed on various appellants. It was argued that the main case related to the demand of excise duty had been settled under the Kar Vivad Samadhan Scheme, and thus penalties should not be imposed again. However, the Tribunal held that the settlement under the K.V.S. Scheme did not affect the present proceedings, which were independent and related to the confiscation of seized goods and imposition of penalties.

3. Non-Entry of Goods in RG 1 Register:
The appellants contended that the non-entry of goods in the RG 1 register was due to the illness of an employee responsible for maintaining the register. The Tribunal rejected this argument, emphasizing that manufacturers are required to maintain accurate records of production and clearance. Failure to do so, even due to prolonged illness, does not excuse the non-entry of goods, making them liable for confiscation and penalties.

4. Liability of Goods Meant for Export:
For goods seized from M/s. Crew B.O.S. Products Pvt. Ltd., it was argued that the goods were meant for export and not for domestic sale, and thus should not be confiscated. The Tribunal dismissed this argument, stating that all manufactured goods must be entered in the RG 1 register, regardless of their intended destination. The Tribunal upheld the confiscation and penalties for non-entry of goods meant for export.

5. Personal Liability of Shri Tarun Oberoi:
The Tribunal examined the penalty imposed on Shri Tarun Oberoi, a partner involved in the firm's operations. It was argued that there was no personal involvement or intent to evade duty. The Tribunal disagreed, noting that Oberoi was actively managing the firm's affairs and thus liable for penalties under Rule 209A.

6. Liability of M/s. Reebok India Company under Rule 209A:
M/s. Reebok India Company argued that they procured branded bags from local manufacturers and had no knowledge of any duty evasion. The Tribunal agreed, noting that there was no evidence to suggest that Reebok India knew or had reason to believe that the goods were liable to confiscation. Consequently, the penalty imposed on Reebok India was set aside, although the confiscation of goods and appropriation of excise duty paid by them were upheld.

Final Orders:
1. M/s. Jodhpur Supply Company:
- Confiscation of goods upheld.
- Redemption fine reduced to Rs. 40,000.
- Penalty reduced to Rs. 30,000.

2. M/s. Crew B.O.S. Products Pvt. Ltd.:
- Confiscation of goods upheld.
- Redemption fine reduced to Rs. 10,000.
- Penalty reduced to Rs. 5,000.

3. Shri Tarun Oberoi:
- Penalty reduced to Rs. 5,000.

4. M/s. Reebok India Company:
- Confiscation of goods upheld.
- Redemption fine reduced to Rs. 50,000.
- Appropriation of excise duty upheld.
- Penalty set aside.