2000 (12) TMI 643 - AT - Central Excise

Confiscation of goods - Non-accountal of goods - Penalty - Evidence - Redemption fine - Seized goods - Provisional release of goods

Summary

Issues:
1. Confiscation of goods not accounted for in statutory registers.
2. Confiscation of goods removed and found in nearby premises.
3. Adjustment of security deposit against duty and penalty.
4. Refund of duty paid on provisionally released goods.
5. Imposition of penalty for intention to evade payment of duty.

Analysis:

1. The appellants were engaged in manufacturing Hydraulic Jacks, Oil Tanks, Trolley. Central Excise officers found unaccounted goods during a visit to the factory. Some finished goods were removed without payment of duty and found in nearby premises. Show-cause notice issued for confiscation and penalty. Adjudicating authority ordered confiscation with an option to redeem on payment of fines and imposed a penalty of Rs. 10,000.

2. The appellants argued against confiscation of provisionally released goods, claiming they were not available for confiscation. They sought refund of duty paid on goods cleared after provisional release. Appellants contended no intention to evade duty for unaccounted goods. Tribunal held confiscation not possible for goods provisionally released and not produced before authority. Penalty under Rule 226 not sustainable without proof of mens rea.

3. Regarding goods in nearby premises, appellants provided contradictory explanations. Tribunal found contradictions in statements and concluded an attempt to suppress the truth, indicating an intention to evade duty. Confiscation of these goods was deemed justified but not possible due to unavailability for confiscation. Imposition of redemption fine was considered unwarranted.

4. The Tribunal dismissed the appellants' claim for refund of duty paid on provisionally released goods. It stated that the security deposit should be adjusted towards payment of other dues, as duty was already paid on the provisionally released goods.

5. The Tribunal upheld the imposition of a penalty of Rs. 10,000 for the intention to evade payment of duty on goods found in nearby premises. It deemed the penalty justified and not excessive. The impugned order was upheld with modifications entitling the appellants to consequential relief. The appeal was partially allowed with the mentioned modifications and consequential relief granted to the appellants.