Tribunal upholds confiscation but reduces fines due to extenuating circumstances

MULTIPLEX PACKAGING (P) LTD. Versus COLLECTOR OF C. EX., BOMBAY

MULTIPLEX PACKAGING (P) LTD. Versus COLLECTOR OF C. EX., BOMBAY - 1999 (112) E.L.T. 923 (Tribunal) Issues involved:
1. Non-posting of entries in RG 1 account for a specific period.
2. Non-accountal of aluminum collapsible tubes and rejected material.
3. Imposition of penalty and fine.

Analysis:

Issue 1: Non-posting of entries in RG 1 account
The Tribunal had previously decided on the inclusion of the value of caps on aluminum collapsible tubes in favor of the appellants. However, a ROM application was filed by the Revenue, highlighting the non-posting of entries in the RG 1 account for a specific period. The appellants argued that the entries were not posted due to the sickness of the dealing clerk, and the goods were cleared after issuing valid GPIs under the relevant rules. The Tribunal observed that an offense had been committed by the appellants by not posting the entries, even though gate passes were issued. The Tribunal acknowledged the sickness of the dealing clerk but noted that some goods were unaccounted for, leading to the confiscation of goods and imposition of fine and penalty. The Tribunal reduced the redemption fine from Rs. 17,000 to Rs. 2,000 and the penalty from Rs. 10,000 to Rs. 1,000, considering the circumstances and the quantum of duty involved.

Issue 2: Non-accountal of aluminum collapsible tubes and rejected material
Apart from the non-posting of entries, the issue of non-accountal of aluminum collapsible tubes and rejected material was raised. The rejected material was returned by customers and proper D-3 intimation was given to the Revenue authorities. The appellants argued that there was no need for accounting the rejected material. The Tribunal found that some goods were unaccounted for, including the rejected material of aluminum collapsible tubes. Despite the submissions made by the appellants, the Tribunal upheld the confiscation of goods, imposition of fine, and penalty. However, the Tribunal reduced the redemption fine and penalty considering the overall circumstances and the duty involved.

Issue 3: Imposition of penalty and fine
The subject appeal primarily revolved around the imposition of penalty and fine due to the non-posting of entries in the RG 1 account and the non-accountal of aluminum collapsible tubes. The Tribunal clarified that the question of inclusion of the value of caps in the collapsible tubes was not part of the appeal, as it had already been decided in favor of the appellants by the lower appellate authority. After hearing both sides, the Tribunal agreed that the penalty and fine imposed were on the higher side. Consequently, the Tribunal reduced the redemption fine and penalty amounts. It was directed that if the goods had not been removed, they should be accounted for in the RG 1, and duty would be paid upon their removal. If the goods had already been removed without duty payment, the appropriate duty as per the date of removal would be levied.