2005 (7) TMI 528 - AT - Central Excise

Tribunal cancels duty demand but imposes penalty for moving goods to unregistered godown

AKASHDEEP PAPERS PVT. LTD. Versus COMMISSIONER OF C. EX., NEW DELHI

The Tribunal set aside the duty demand in a case involving a discrepancy in the balance stock of kraft paper, as the goods were available in an ... Demand - Clandestine removal by registered dealer Issues:1. Discrepancy in balance stock of kraft paper.2. Registration of godown with Revenue authorities.3. Contravention of Central Excise rules.4. Liability for penalty.Discrepancy in balance stock of kraft paper:The appellant, a registered dealer, filed an appeal against the order-in-appeal passed by the Commissioner (Appeals) regarding a discrepancy in the balance stock of kraft paper as per their statutory record and the actual stock found in their premises. The appellant argued that the kraft paper was stored in a different godown not registered with the excise authorities but registered with the sales tax authority. The Revenue contended that the duty demand was justified as the kraft paper was not found in the registered godown. The Tribunal noted that the goods were indeed stored in an unregistered godown, as acknowledged in the impugned order. The demand for duty was set aside since the goods were available, but the appellant was held liable for penalty due to the removal of goods from the registered godown without informing the Revenue authorities.Registration of godown with Revenue authorities:The appellant's main defense was that the kraft paper was stored in a godown different from the registered one, which the Commissioner (Appeals) found to be a suppression of facts and a contravention of Central Excise rules. The Revenue argued that registered dealers must declare godowns to verify goods. While the Tribunal acknowledged the presence of goods in the unregistered godown, it emphasized that removal without informing the Revenue authorities warranted penal action. The appellant's request for registration of the premises was made after the discovery, further complicating the situation.Contravention of Central Excise rules:The Commissioner (Appeals) concluded that the appellant contravened Central Excise rules by not seeking prior permission for moving the kraft paper to an unregistered godown. The Tribunal agreed that the removal without intimation was a violation, leading to the imposition of a penalty of Rs. 5,000 to meet the ends of justice. Despite acknowledging the availability of goods, the Tribunal emphasized the importance of following procedures and notifying authorities to avoid such contraventions.Liability for penalty:In light of the facts and circumstances, the Tribunal held the appellant liable for a penalty of Rs. 5,000 for contravening Central Excise rules by moving goods to an unregistered godown without informing the Revenue authorities. The penalty was deemed necessary to ensure compliance with regulations and maintain the integrity of the excise system. The appeal was disposed of with the decision to uphold the penalty while setting aside the duty demand due to the availability of goods in the unregistered godown.