1993 (7) TMI 205 - AT - Central Excise

Tribunal decision: Verify duty, allow Modvat credit, reduce penalties.

The Tribunal directed the adjudicating authority to verify duty discharge for seized goods, stating that if duty was paid, it should not be imposed again. ... Demand on goods provisionally released subject to payment of duty Issues:1. Duty liability on seized goods without proper entries in the statutory register.2. Disallowance of Modvat credit on countervailing duty.3. Appropriation of security deposit and penalty amount.Analysis:Issue 1: Duty liability on seized goods without proper entriesThe appellants were charged with duty liability on goods seized without proper entries in the statutory register. The appellants argued that they had cleared the goods under valid gate passes and had made proper debit entries in the RG 23A Part II Register as directed by the authorities. The Tribunal noted that if the duty had been discharged as claimed by the appellants, they should not be liable to pay duty again. The adjudicating authority was directed to verify the discharge of duty liability, and if confirmed, the duty should not be imposed again.Issue 2: Disallowance of Modvat credit on countervailing dutyThe appellants contended that they were entitled to Modvat credit on countervailing duty paid on imported goods. The Tribunal found that the adjudicating authority had not provided any reason for disallowing the Modvat credit. The Tribunal set aside the disallowance and directed the authority to allow the credit after proper verification. The appellants had followed the directions given by the authorities and had taken the necessary steps to avail of the Modvat credit.Issue 3: Appropriation of security deposit and penalty amountRegarding the appropriation of the security deposit and penalty amount, the Tribunal reduced the appropriation from Rs. 10,000 to Rs. 7,500 for non-production of goods and reduced the penalty from Rs. 10,000 to Rs. 5,000 for each appellant. The Tribunal considered the circumstances and deemed the original amounts to be excessive for what was deemed as technical breaches. The reduced amounts were deemed sufficient to serve the ends of justice.Additional observations by Member (T)The Member (T) highlighted the removal of goods without payment of duty and the denial of Modvat credit on countervailing duty as key issues. The Member noted that removal without payment of duty was a violation, but leniency was shown in determining the penalty and redemption fine. The denial of Modvat credit lacked reasoning and required the lower authority to reconsider the case after providing the appellants with an opportunity to address any alleged breaches that would disentitle them from the Modvat credit benefit.