2012 (12) TMI 432 - AT - Central Excise

Tribunal rules in favor of appellant, no duty imposed on seized goods; Rs. 5,000 penalty under Rule 27.

SHARDA MOTOR INDUSTRIES Versus COMMR. OF C. EX. & ST., LTU, DELHI

SHARDA MOTOR INDUSTRIES Versus COMMR. OF C. EX. & ST., LTU, DELHI - 2012 (282) E.L.T. 428 (Tri. - Del.) Issues:1. Discrepancy in recording of goods and confiscation of goods.2. Allegation of evasion of duty and penalty imposition.Analysis:Issue 1: Discrepancy in recording of goods and confiscation of goodsThe appellant's counsel argued that the search conducted resulted in finding impugned goods, which were provisionally released after payment of redemption fine and duty. The appellant maintained that raw materials were issued for job work, and the return of job worked goods was recorded, which was undisputed. The appellant contended that there was no attempt to remove finished goods without duty payment, as the goods were found in the factory itself. The counsel emphasized that the appellant's actions were transparent and known to investigators, with proper excise evidence against issuance of raw materials. The appellant cited a judgment to support the claim that when storage of raw material and job worked goods were recorded, there was no basis for alleging clandestine removal. The Revenue argued that the unaccounted goods led to confiscation and penalty. The Tribunal noted that the investigation failed to consider crucial evidence related to the origin and destination of job worked goods. It was highlighted that the investigation did not examine job workers' payments, verify issued raw materials, or review past job work orders. The Tribunal found that the evidence presented by the appellant was not adequately considered, and the investigation lacked thoroughness in examining the manufacturing process and inventory records. Ultimately, the Tribunal ruled in favor of the appellant, stating that no further duty should be levied on the seized goods, as there was no evidence of attempted evasion or duty evasion, rendering confiscation unwarranted.Issue 2: Allegation of evasion of duty and penalty impositionRegarding the imposition of penalties, the Tribunal considered the appellant's intent to evade duty as a crucial factor. It was determined that there was no evidence of attempted evasion, and the appellant's conduct did not exhibit contumacious behavior. However, a penalty was deemed necessary for the violation of not recording goods on a specific day. The appellant's counsel argued against any penalty due to the lack of substantiated allegations. The Tribunal decided to impose a penalty of Rs. 5,000 under Rule 27 of the Central Excise Rules, 2002, for the violation of not recording goods, while dismissing any other penalties. The Tribunal partially allowed the appeal, setting aside the impugned order to the extent of penalty imposition. The connected appellant's appeal was fully allowed. The decision concluded that both stay applications were disposed of in light of the judgment.