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<h1>Appellate Tribunal rules in favor of appellant in duty demand case under Central Excise Rules</h1> The Appellate Tribunal CEGAT, New Delhi, ruled in favor of the appellant in a case concerning duty demand on biris, confiscation, and penalty imposition ... Biris - Physical control - Effect Issues:- Duty demand on biris manufactured by the appellant- Confiscation and penalty imposition under Central Excise Rules, 1944- Contravention of Rule 51 regarding marking of serial numbers on gunny bags- Allegation of substitution of unaccounted gunny bags- Procedural contraventions leading to penalty impositionAnalysis:The appeal before the Appellate Tribunal CEGAT, New Delhi was against the order of the Additional Collector of Central Excise, who demanded duty on biris manufactured by the appellant, confiscated the goods, and imposed a penalty under the Central Excise Rules, 1944. The main issue revolved around the contravention of Rule 51, which required marking serial numbers on gunny bags. The appellant argued that the goods were not 'made ready for removal from the factory' as duty had not been paid, and the Central Excise Officer had not supervised the removal process. The Tribunal rejected the department's interpretation of Rule 51, emphasizing that the rule applies when goods reach the stage of manufacture or are made ready for removal from the factory. The absence of markings on gunny bags did not pose a risk to revenue as the goods were under physical control and could not be removed without the presence of Central Excise Officers.Another significant finding by the Collector was the alleged substitution of unaccounted gunny bags with packets lacking markings. However, the Tribunal found no evidence of clandestine removal and disagreed with the department's conclusion. The imposition of a penalty was based on procedural contraventions such as failure to enter goods in the RG-12B register, cuttings and over-writings in the RG-12 register, and discrepancies in balances. The appellant acknowledged these lapses but argued they were procedural and did not indicate an intent to evade duty. Despite acknowledging the contraventions, the Tribunal agreed with the appellant that the penalty should be reduced. Consequently, the Tribunal set aside the confiscation and duty demand while reducing the penalty imposed on the appellant to Rs. 1000.
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