Tribunal reduces penalty for non-record keeping, dismisses Revenue's appeal.

The Tribunal upheld the Commissioner (Appeals)'s decision to set aside the confiscation of excess goods and reduce the penalty to Rs.20,000 due to non-maintenance of records. The Revenue's appeal was dismissed as there was no evidence of intention to evade duty in the non-entry of goods in statutory records.

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Issues: Appeal against order of Commissioner (Appeals) setting aside confiscation of excess goods and reducing penalty due to non-maintenance of records.

Issue 1: Confiscation of excess goods and imposition of penalty
The case involved a dispute regarding the confiscation of excess footwear soles found during a visit to the respondent's factory. The central excise officers discovered 33,160 pairs of soles in excess as per statutory records. The Manager of the factory claimed that a portion of these soles were rejected and not fit for entry in the RG-I Register. The original adjudicating authority imposed a redemption fine of Rs.5 Lakh and a penalty of Rs.2 Lakh. On appeal, the Commissioner (Appeals) reduced the penalty to Rs.20,000, citing lack of evidence of intention to clear goods without payment of duty. The Revenue appealed against this decision.

Issue 2: Lack of evidence for intention to evade duty
The key point of contention was whether the non-entry of goods in the statutory records was done with a malicious intent to evade duty. The Tribunal noted that the Revenue failed to provide any evidence to support the claim of malafide intention. The Manager's statement regarding the rejected quality of the majority of soles remained unrebutted. Drawing from a previous Tribunal decision, the Tribunal held that the case was a mere non-entry in the RG-23 Part-I register. The Tribunal found no fault in the Commissioner (Appeals)'s decision to reduce the penalty based on the lack of evidence of intention to evade duty.

Conclusion
After thorough consideration of the grounds of appeal and the facts of the case, the Tribunal upheld the decision of the Commissioner (Appeals) to set aside the confiscation of excess goods and reduce the penalty to Rs.20,000 due to the non-maintenance of records. The Revenue's appeal was dismissed, emphasizing the importance of evidence of intention to evade duty in cases involving non-entry of goods in statutory records.

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