2003 (10) TMI 506 - AT - Central Excise

Appellate Tribunal rules in favor of Chandan Chemicals in penalty and confiscation appeal

The Appellate Tribunal CESTAT, NEW DELHI heard an appeal regarding the imposition of a penalty and confiscation of goods against M/s. Chandan Chemicals. ... Confiscation of goods for non-maintenance of statutory records - penalty for failure to maintain RG 23D register - permissibility of not entering consignments received under Rule 52A invoices in RG 23D register - issue of modvatable and non-modvatable invoices - interpretation and application of Board Circular No. 96/7/95-CX dated 13-2-95 (para 9(C))Permissibility of not entering consignments received under Rule 52A invoices in RG 23D register - penalty for failure to maintain RG 23D register - confiscation of goods for non-maintenance of statutory records - issue of modvatable and non-modvatable invoices - interpretation and application of Board Circular No. 96/7/95-CX dated 13-2-95 (para 9(C)) - Whether non-entry of consignments received under Rule 52A invoices in the RG 23D register, when those consignments are not intended to be sold against modvatable invoices, attracts penalty and confiscation. - HELD THAT: - The Board's Circular dated 13-2-95 dealing with invoices under Rule 57G was applied. Paragraph 9(C) of that Circular permits a registered person not to record in the RG 23D register details of consignments for which he does not propose to issue modvatable invoices. The appellants had received the impugned consignment under Rule 52A invoices and intended to sell the entire quantity on non-modvatable (retail) invoices; therefore the statutory obligation to enter those consignments in RG 23D did not arise in the circumstances covered by the Circular. Consequently, imposition of penalty and confiscation premised on non-entry in RG 23D could not be sustained.Impugned order imposing penalty and confiscating the goods on account of non-entry in RG 23D set aside; appeal allowed with consequential relief.Final Conclusion: Appeal allowed. The Tribunal held that under para 9(C) of the Board Circular dated 13-2-95, consignments not intended to be sold against modvatable invoices need not be entered in the RG 23D register; accordingly the penalty and confiscation based on non-entry were set aside and the impugned order was quashed. Issues: Imposition of penalty and confiscation of goodsIn this case, the Appellate Tribunal CESTAT, NEW DELHI heard an appeal regarding the imposition of a penalty and confiscation of Sodium Tripoly Phosphate and glycerin against M/s. Chandan Chemicals. The Appellant argued that they are a registered dealer under the Central Excise Rules and had received a consignment of Sodium Tripoly Phosphate which they intended to sell in retail on non-modvatable invoices. They contended that as per Circular No. 96/7/95-CX, they were not required to enter this consignment in their RG 23D Register since they did not intend to issue modvatable invoices. On the other hand, the Departmental Representative argued that the goods were not accounted for as required under Rules 52AA and 57AE(3) of the Central Excise Rules, 1944.The Tribunal considered the submissions of both parties and referred to the Circular dated 13-2-95, which allowed registered persons not to enter details of consignments for which modvatable invoices were not intended to be issued into the RG 23D Register. Since the impugned goods were not meant to be sold with modvatable invoices, the Tribunal held that there was no obligation for the Appellants to enter them into their RG 23D register. Consequently, the Tribunal set aside the previous order, allowing the appeal with consequential relief.