Tribunal upholds penalties on excess stock & unrecorded clearance, reduces one penalty

The Tribunal upheld the Commissioner's decision to confiscate excess stock of finished goods and impose penalties on the appellant company and its Director. The penalties were reduced to the Central Excise duty on the excess stock, and the demand for duty was upheld due to unrecorded stock clearance without payment. The Tribunal reduced one penalty to 50,000 but rejected the appeal against the duty demand. The decision was made on 27.03.2018.

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Issues involved:
1. Appeal against the Order-in-Appeal Nos.16-17/BOL/2016-17 dated 19.04.2016 & Appeal No.E/76305/16 against the Order-in-Appeal No.15/BOL/2016-17 dated 19.04.2016.
2. Confiscation of excess stock of finished goods and penalty imposition.
3. Discovery of unrecorded stock in a mobile phone.
4. Show Cause Notice issued for demand of duty, interest, and penalty.
5. Imposition of penalties on the appellant company and its Director.
6. Appeal against the penalties imposed and demand of duty.

Analysis:
1. The Appellants filed appeals against the orders passed by the Commissioner (Appeals II) of Central Excise, Kolkata regarding the confiscation of excess stock of finished goods and penalty imposition. The Commissioner (Appeals) modified the adjudication order reducing the penalty to the Central Excise duty in excess stock of seized goods. Another appeal was filed against the demand of duty, interest, and penalty proposed in a Show Cause Notice based on the discovery of unrecorded stock in a mobile phone.

2. The Manager of the appellant Company accepted the excess stock of finished goods found by Central Excise Officers. The stock was detected after considering clearances and closing stock, indicating unrecorded balance. The Commissioner (Appeals) noted the failure of the appellant to record the excess stock, justifying the imposition of a fine in lieu of confiscation. However, the fine amount was deemed excessive and required reduction. Previous appeals by Revenue against dropped penalties were dismissed based on the Litigation Policy.

3. The issue in the second appeal was the clearance of unrecorded stock of finished goods clandestinely removed without payment of duty. The Director of the appellant company admitted to the non-existence of the stock and acknowledged the clearance without duty payment. The Commissioner (Appeals) upheld the demand of duty, citing the admission of clearance without payment. The invocation of the extended period of limitation was supported by the admission of goods being cleared without duty payment.

4. The Tribunal reduced the penalty amount in one appeal and rejected the other, maintaining the Commissioner (Appeals) orders. The reduction in penalty was to &8377; 50,000 in one case, while the appeal against the demand of duty was rejected. The decision was pronounced on 27.03.2018.

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