2001 (7) TMI 685 - AT - Central Excise

Summary

Issues:
1. Confiscation of excess stock due to non-accountability.
2. Imposition of penalty under Rule 173Q and Rule 209A.
3. Appeal against the order of confiscation and penalty.

Issue 1: Confiscation of excess stock due to non-accountability

The appellants were found to have an excess quantity of bags during a visit by officers, with the Works Manager attributing it to labor unrest. The authorities initiated proceedings, leading to a show cause notice for confiscation of goods and recovery of duty. The Dy. Commissioner ordered confiscation of goods valued at Rs. 6,09,020, with an option to redeem on payment of a fine of Rs. 1 lakh. The goods were to be accounted for in statutory records and cleared on payment of proper duty. The Adjudicating Authority imposed penalties on the company and its representatives under Rule 173Q and Rule 209A, respectively.

Issue 2: Imposition of penalty under Rule 173Q and Rule 209A

The Dy. Commissioner imposed a penalty of Rs. 50,000 on the appellants under Rule 173Q, along with penalties on the Works Manager and a company representative under Rule 209A. The penalties were justified based on the findings of non-accountability of goods and failure to meet statutory obligations despite the labor unrest explanation provided by the appellants.

Issue 3: Appeal against the order of confiscation and penalty

M/s. Essel Mining and Industries filed an appeal before the Commissioner (Appeals), who rejected it, upholding the original authority's decision. In the second stage appeal, the appellants argued labor unrest led to the non-accountability of goods, citing a precedent. However, the Appellate Tribunal found that despite the labor unrest, the finished goods were in the bonded store room, indicating normal production activities. The Tribunal noted the marketability of the printed bags and the failure of the appellants to establish bona fides regarding non-accountability. Consequently, the redemption fine was reduced to Rs. 50,000, and the penalty to Rs. 25,000, while the appeal was rejected, affirming the confiscation and penalties imposed.

This detailed analysis of the judgment highlights the issues of confiscation, penalty imposition, and the subsequent appeal process, providing a comprehensive overview of the legal proceedings and decisions made by the authorities and the Appellate Tribunal.