2002 (9) TMI 241 - AT - Central Excise

Tribunal decision: duty demand set aside, penalty reduced, confiscation upheld in steel ingots case

The tribunal set aside the duty demand for the alleged clandestine removal of steel ingots, upheld the confiscation of unaccounted ingots, reduced the ... Demand - Clandestine manufacture and removal - Shortages of steel scrap - Evidence Issues:1. Alleged removal of steel scrap converted into steel ingots without duty payment.2. Excess steel ingots and shortage of steel scrap found during inspection.3. Confiscation and penalty imposed by the Deputy Commissioner of Central Excise.4. Rejection of appeal by the Commissioner (Appeals) and subsequent appeal against the order.Analysis:1. The case involved an allegation that the appellants removed steel scrap after converting it into steel ingots without paying the required duty. The Central Excise staff found an excess of 25 pieces of steel ingots and a shortage of 35.280 MTs of steel scrap during a visit to the factory premises. A show cause notice was issued, accusing the party of violating various provisions of the Central Excise Rules and the Central Excise Act.2. The Deputy Commissioner of Central Excise confirmed the duty amount on the steel ingots and ordered the confiscation of the excess steel ingots, which were already released under bond, imposing a fine in lieu of confiscation. Additionally, a penalty was levied on the appellants.3. The Commissioner (Appeals) rejected the party's appeal, upholding the findings of the Central Excise staff regarding the excess steel ingots and shortage of steel scrap. The appeal against this order raised concerns about the lack of evidence supporting the conversion of steel scrap into steel ingots without duty payment. The tribunal found the original adjudicating authority's conclusion to be based on conjecture and set aside the duty demand related to the alleged clandestine removal of steel ingots.4. The tribunal upheld the confiscation of the unaccounted steel ingots and imposed a redemption fine. The penalty imposed was reduced considering the circumstances of the case. The appellants' claim of having paid duty on the steel ingots was acknowledged, relieving them from paying the duty again.5. In conclusion, the tribunal disposed of the appeal and the Miscellaneous Petition, setting aside the duty demand for alleged clandestine removal of steel ingots, upholding the confiscation of unaccounted ingots, reducing the penalty, and acknowledging the duty payment made by the appellants.