2019 (7) TMI 555 - AT - Central Excise

Clandestine manufacture - TMT bars - excess manufactured goods which are not accounted for in the statutory records - confiscation - redemption fine - penalty - HELD THAT - TMT bars were found in excess lying in their stock without entering in the statutory records manufactured by the appellant. Therefore, due to non maintenance of proper records, the goods are liable for confiscation under Rule 25 of the Central Excise Rules, 2002 - the goods rightly confiscated by the authorities below. Redemption fine - penalty - HELD THAT - The redemption fine of ₹ 6.50 lakh imposed on the goods is on the higher side, therefore, the redemption fine is reduce to ₹ 4 lakh - penalty is reduced to ₹ 75,000/-. Appeal allowed in part.

Summary

Issues involved:
- Confiscation of excess manufactured goods not accounted for in statutory records
- Imposition of redemption fine and penalty on the appellant

Confiscation of excess manufactured goods not accounted for in statutory records:
The appellant, engaged in the manufacture of TMT bars, had 155.979 MT of TMT bars found unaccounted for during a search in their factory premises. A show cause notice was issued for confiscation of the seized goods and imposition of penalty and redemption fine. The seized goods were confiscated but allowed to be redeemed on payment of a redemption fine of &8377; 6.50 lakhs along with a penalty of &8377; 1 lakh. The appellant contended that as there was no variation in inputs and the unaccounted goods were of odd size and not marketable, redemption fine and penalty should not be imposed. The authorities argued that since the goods were found in excess in the factory premises without being recorded in statutory records, the redemption fine and penalty were justified. After hearing both parties, it was held that the TMT bars found in excess were liable for confiscation under Rule 25 of the Central Excise Rules, 2002 due to non-maintenance of proper records by the appellant.

Imposition of redemption fine and penalty on the appellant:
The appellate tribunal, after considering the submissions, found that the redemption fine of &8377; 6.50 lakhs imposed on the goods was excessive. Consequently, the redemption fine was reduced to &8377; 4 lakh and the penalty was reduced to &8377; 75,000. The tribunal disposed of the appeal in these terms, emphasizing the importance of maintaining proper records to avoid such confiscation and penalties in the future.

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