2002 (12) TMI 180 - AT - Central Excise

Tribunal Decision: Confiscation upheld for unaccounted goods, penalties reduced, credit disallowances affirmed

The Tribunal upheld the confiscation of unaccounted video cassettes due to failure to provide a valid explanation for not recording the goods, reducing ... Accountal of goods - Demand - Shortage of goods - Cenvat/Modvat - Reversal of - Penalty Issues:1. Confiscation of unaccounted video cassettes and duty imposition.2. Disallowance of Modvat credit on plastic components and magnetic video tapes.3. Disallowance of Modvat credit on inputs found short in the factory.4. Demand on video games and cartridges found without bills.5. Imposition of penalty under Rule 173Q.Confiscation of Unaccounted Video Cassettes and Duty Imposition:The appeal was filed against an order confirming duty, penalties, and disallowing Modvat credit. Unaccounted goods, including video cassettes, were found in excess or short during a search. The appellants were accused of clandestinely removing goods without duty payment and wrongly availing Modvat credit. The Tribunal upheld the confiscation of unaccounted cassettes, citing the appellants' failure to provide a valid explanation for not recording the goods. The Tribunal rejected the appellants' argument based on a previous case, emphasizing the appellants' intent to evade duty. Redemption fine and personal penalty were reduced.Disallowance of Modvat Credit on Plastic Components and Magnetic Video Tapes:Modvat credit disallowance on plastic components was not contested. However, the appellants disputed the disallowance on magnetic video tapes, arguing they should only reverse the credit availed on the short-found inputs. The Tribunal agreed, citing a precedent that the duty rate at input clearance should apply for reversing credit. The demand for a differential amount was set aside, and the appellants were directed to reverse the specific credit amount.Disallowance of Modvat Credit on Inputs Found Short in the Factory:The disallowance of Modvat credit on inputs found short in the factory was not contested and was affirmed by the Tribunal.Demand on Video Games and Cartridges Found Without Bills:The demand on video games and cartridges found without bills was contested as it had been previously dropped by the adjudicating authority. The Tribunal set aside this part of the order, noting that the demand had already become final and could not be reconfirmed.Imposition of Penalty under Rule 173Q:The adjudicating authority imposed a penalty under Rule 173Q, which the appellants argued was excessive. The Tribunal reduced the penalty considering that the appellants had already reversed Modvat credit and paid the duty, ultimately reducing the penalty amount.Conclusion:The Tribunal reversed or modified the impugned order-in-original of the Commissioner on various grounds, including reducing penalties and confirming duty demands. The appeal was disposed of accordingly, with adjustments made to penalties and credit disallowances based on the specific circumstances and legal precedents cited during the proceedings.