2013 (7) TMI 831 - AT - Central Excise

Clandestine Removal of goods - Appellant is engaged in the manufacture of M.S. Ingots - Appellant was not maintaining any records of purchase of raw materials, production of finished goods etc Held that - From the statement of melter and chowkidar, and the evidence collected by the Revenue from the electric Department etc, revealed that the appellant was manufacturing M.S. Ingots without making a proper declaration and without maintaining any record etc After the provisional release of the goods, the same were cleared on payment of duty - the penalty reduced to 25% - redemption fine of Rs. 1,04,600/-,duty involved in respect of seized goods was to the tune of Rs. 68,256/- and as such, redemption fine imposed is much on the higher side. Accordingly, the same is reduced to Rs. 25,000/-.- penalty upon the Director, as the manufacturing unit has already been penalized, penalty reduced to Rs.10,000/-

Summary

Issues:
1. Confirmation of demand of duty against M/s Isher Alloys Pvt. Ltd.
2. Imposition of penalty on M/s Isher Alloys Pvt. Ltd. and its Director.
3. Confiscation of seized goods with redemption fine.

Confirmation of Demand of Duty:
The appellant, engaged in manufacturing M.S. Ingots, was accused of removing goods clandestinely without paying duty. Central Excise officers found the appellant not maintaining necessary records during a visit to their factory. Statements from employees and evidence revealed the manufacturing was done without proper declaration or record-keeping. The original adjudicating authority confirmed the demand of duty, which was upheld by the Commissioner (Appeals).

Imposition of Penalty:
The appellant did not contest the duty confirmation and paid the duty before the show cause notice. The penalty was reduced to 25% of the duty amount. The redemption fine was deemed excessive and reduced from Rs. 1,04,600 to Rs. 25,000. The penalty on the Director, imposed at 100% of the duty amount, was considered unjustified as the manufacturing unit had already been penalized. The Director's penalty was thus reduced to Rs. 10,000.

Confiscation of Seized Goods with Redemption Fine:
The duty involved in the seized goods was Rs. 68,256. The redemption fine of Rs. 1,04,600 was considered high and reduced to Rs. 25,000. The penalty on the Director was also reduced to Rs. 10,000 as the unit had already been penalized. Both appeals were disposed of accordingly.

---