2005 (9) TMI 20 - AT - Central Excise

Tribunal grants relief in duty confirmation case, sets aside unjustified confiscation, emphasizes statutory compliance

The Tribunal set aside the unjustified confiscation of goods not yet ready for dispatch, granting relief to the appellants in a case involving duty ... Confiscation and penalty – alleged that appellant used to show wrong quantity of finished good & raw material - after considering all the details find that appellant had no intention to evade duty, so confiscation and penalty set aside. Issues:1. Duty confirmation on short found inputs2. Confiscation of excess found final products3. Imposition of personal penalty4. Acceptance of appellant's stand on raw material shortages5. Rejection of appellant's contention on excess found goods6. Appeal against the order of confiscationAnalysis:1. The appellants, engaged in the manufacture of aluminium and alloy conductors, faced duty confirmation on short found inputs after Central Excise Officers found discrepancies in the stock during a visit to their factory. Proceedings were initiated for confiscation of goods and imposition of penalty. The Assistant Commissioner confirmed duty on short found inputs and imposed a personal penalty equivalent to the duty involved on shortages.2. The Assistant Commissioner also confiscated the excess found final products, allowing the appellants to redeem them on payment of a redemption fine. On appeal, the Commissioner (Appeals) accepted the appellant's explanation regarding raw material shortages but upheld the confiscation of excess found goods, rejecting the appellant's claim that the goods were not yet in a finished stage and were awaiting inspection by the Electricity Board.3. During the hearing, the appellant contended that the goods were tailor-made for the Electricity Board, requiring strict quality control and technical parameters set by the Board. The goods needed approval from the Board's technical team before being packed as per specified parameters and entered into statutory records. The authorities rejected this contention, stating it was not brought to the notice of visiting officers and that the goods could be sold in the open market.4. The Tribunal noted that at the time of the officers' visit, the goods were in the factory premises but not in a packed, ready-to-dispatch condition. There was no evidence indicating an intention to remove the goods without duty payment. As a result, the Tribunal concluded that the goods were not ready for entry in the RG-1 register, leading to the unjustified confiscation being set aside, allowing the appeal in that regard.5. The judgment was pronounced in court on 26-9-2005 by the Tribunal, providing relief to the appellants regarding the confiscation of goods not yet ready for dispatch and highlighting the importance of compliance with statutory requirements in excise matters.