2005 (4) TMI 369 - AT - Central Excise

Redemption fine reduced for clerical error in duty payment; partner's penalty dismissed. Duty liability maintained.

The Tribunal reduced the redemption fine from Rs. 9,000 to Rs. 5,000 for an appellant who cleared goods without paying duty due to clerical errors. The ... Redemption fine - Penalty Issues:1. Duty payment for cleared goods.2. Reduction in redemption fine.3. Penalty imposition on the partner.Analysis:1. The issue of duty payment for cleared goods arises from the appellant's clearance of 70 bags of cotton yarn from their factory, while duty was paid for only 50 bags. The remaining 20 bags were found cleared without payment of duty when intercepted by Central Excise officers. The appellant acknowledged the mistake, attributing it to a clerk error, and requested a reduction in the redemption fine and penalty imposed on the partner of the manufacturing firm. The contention was that the goods were accounted for in the production records, and the error occurred due to improper instructions communicated to the loading staff by the Excise clerk.2. Regarding the reduction in redemption fine, the Tribunal considered the submissions from both sides. It was observed that once the goods were recorded in the RG-1 Register and then cleared without payment of duty, there was a possibility of incorrect instructions given to the loading staff. The Tribunal agreed that in such a situation, where the goods were already entered in the register, the appellants were obligated to clear the goods upon payment of duty. Consequently, the Tribunal decided to reduce the redemption fine from Rs. 9,000 to Rs. 5,000.3. The issue of penalty imposition on the partner was addressed by the Tribunal. The penalty imposed on the manufacturing unit was set aside by the Commissioner (Appeals), leading to the dismissal of the penalty on the partner. As a result of the discussions and considerations, the Tribunal rejected the appeal of the main appellants while allowing the appeal of the partner, setting aside the penalty imposed on him. The judgment concluded by reducing the redemption fine but maintaining the duty liability on the goods found short in the factory, which were seized from the truck.