2002 (7) TMI 211 - AT - Central Excise

Revenue's Appeal Dismissed, Tribunal Upholds Penalty for Unaccounted Machines

The Revenue's appeal against the order-in-appeal by the Commissioner (Appeals) was dismissed. The Tribunal upheld the penalty imposed on the respondents ... Confiscation of goods for non-accountal in R.G.1 - Liability under Rule 173Q of the Rules - Penalty under Rule 226 of the Rules - Intention to evade duty as determinant of penal actionConfiscation of goods for non-accountal in R.G.1 - Liability under Rule 173Q of the Rules - Intention to evade duty as determinant of penal action - Whether un accountal of machines in R.G.1, without evidence of intent to evade duty, attracts confiscation under Rule 173Q. - HELD THAT: - The Tribunal applied its earlier decision that where goods are found lying un accounted in R.G.1 but there is no evidence that the un accountal was with the intent to evade payment of duty, the penal provisions under Rule 173Q are not attracted. The facts recorded show the machines were found in the factory and there was no attempt by the respondents to clear them without payment of duty. In that factual matrix the Tribunal held that Rule 173Q does not apply and confiscation is not justified. [Paras 3]Rule 173Q not attracted in absence of intent to evade; confiscation not sustained.Penalty under Rule 226 of the Rules - Intention to evade duty as determinant of penal action - Whether a penalty under Rule 226 is appropriate when goods are un accounted but no intent to evade duty is shown. - HELD THAT: - Relying on the Tribunal's consistent view, the appropriate consequence for un accountal of goods in the absence of evasion is a penalty under Rule 226. The Commissioner (Appeals) reduced the penalty to the statutory amount under Rule 226 and ordered release of the machines on payment of redemption fine. The Appellate Tribunal found no infirmity in that conclusion and upheld the imposition of the penalty under Rule 226. [Paras 3, 4]Penalty under Rule 226 upheld and release on redemption fine affirmed.Final Conclusion: Revenue appeal dismissed; impugned order upheld that confiscation under Rule 173Q is not attracted in absence of intent to evade duty and the limited penalty under Rule 226, with release on redemption fine, is sustained. The appeal was filed by the Revenue against the order-in-appeal passed by the Commissioner (Appeals). The factory premises of the respondents were searched, and unaccounted machines were found. The Tribunal upheld the penalty imposed under Rule 226 of the Rules, citing a previous case as precedent. The appeal was dismissed.