2001 (10) TMI 147 - AT - Central Excise

Confiscation order set aside, penalty upheld for non-accountal of goods, Modvat credit disallowed

The Tribunal set aside the confiscation order but upheld the penalty for non-accountal of goods. The disallowance of Modvat credit on the inputs found ... Confiscation and penalty - Modvat Issues: Appeal against confiscation of goods, demand of duty, disallowance of Modvat credit, and imposition of penalty.In this case, the Central Excise Officers found excess and shortage of goods during a visit to the factory premises. The director of the company admitted to the shortages and excesses, attributing them to the absence of an excise clerk. A show cause notice was issued, leading to the confiscation of goods, recovery of duty, disallowance of Modvat credit, and imposition of a penalty. The appellants argued that the shortages were used in the manufacturing process, thus no duty evasion occurred. The ld. Advocate contended that confiscation was unwarranted, citing relevant case law. The ld. Counsel argued that the shortages were due to oversight and could be correlated, hence disallowance of Modvat credit was unjustified. The ld. Counsel also challenged the penalty, claiming no intention to evade duty. The ld. DR, however, maintained that the shortages and excesses were admitted, justifying the actions taken. The Tribunal found no evidence of clandestine removal of excess goods and set aside the confiscation order but upheld the penalty for non-accountal of goods. The Tribunal also upheld the disallowance of Modvat credit on the inputs found short, as the explanations provided were deemed unconvincing. The appeal was disposed of accordingly.