Tribunal modifies redemption fine and penalty, upholds goods confiscation.

The Tribunal set aside the Commissioner (Appeals)'s order and restored the Original Authority's decision, upholding the confiscation of goods but modifying the redemption fine and penalty amount. The redemption fine was reduced to Rs. 25,000/-, and the penalty under Section 11AC was converted to Rs. 5,000/-. The appeal was disposed of on 10-12-2009.

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Issues:
Appeal against modification of order by Commissioner (Appeals) regarding confiscation and penalty reduction.

Analysis:
The case involved an appeal filed by the Department against the order of the Commissioner (Appeals) modifying the order of the Original Authority, which related to confiscation and penalty reduction. The officers found excess stock of PVC Pipes during a visit to the respondent's premises, leading to the confiscation of 12,100 Kgs of unaccounted goods valued at Rs. 2,42,000/-. The Original Authority allowed redemption on payment of a fine of Rs. 62,500/- and imposed a penalty of Rs. 39,527/- under Section 11AC read with Rule 25 of the Central Excise Rules, 2002. On appeal, the Commissioner (Appeals) set aside the confiscation and reduced the penalty to Rs. 5,000/-.

The Department argued that the respondent had a substantial quantity of unaccounted stock, and proper accounts were not maintained, suggesting a potential clandestine removal. They sought to set aside the order of the Commissioner (Appeals) and restore the Original Authority's decision. The respondent contended that the variation in the Panchnama was not based on actual weighment and claimed it was a case of irregular maintenance of accounts rather than clandestine removal.

Upon careful consideration, the Tribunal found that the excess stock of 12,100 Kgs was a result of improper maintenance of accounts, although there was no evidence of attempted clandestine removal. The Tribunal held that the confiscation of unaccounted goods needed to be upheld due to the failure to maintain proper accounts. Accordingly, the order of the Commissioner (Appeals) setting aside the confiscation was deemed improper. The redemption fine was reduced to Rs. 25,000/-, and the penalty under Section 11AC was converted to Rs. 5,000/- under Rule 27 of the Central Excise Rules, 2002.

In conclusion, the Tribunal set aside the order of the Commissioner (Appeals) and restored the Original Authority's decision, upholding the confiscation of goods but modifying the redemption fine and penalty amount. The appeal was disposed of accordingly on 10-12-2009.

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