2002 (4) TMI 439 - AT - Central Excise

Summary

Issues:
Non-filing of pre-budget declaration under Rule 223B(1) of the Central Excise Rules, 1944 leading to confiscation of goods, imposition of penalty, and challenge against the decision of the Commissioner (Appeals) regarding confiscation and redemption fine.

Analysis:
The case involved a situation where the manufacturers of Barley Malt did not file the pre-budget declaration as required under Rule 223B(1) of the Central Excise Rules, 1944. Despite their stock of final products matching the recorded balance in RG-1, the department proposed to confiscate the stock and impose penalties. The adjudicating authority confiscated the goods and imposed a redemption fine along with a penalty. In the appeal, the manufacturers contested the confiscation and redemption fine, arguing that the non-filing of the declaration was a minor technical lapse. The lower appellate authority set aside the confiscation and redemption fine but upheld the penalty, leading to the Revenue appealing against the decision.

Upon examination, it was established that the manufacturers did not file the mandatory pre-budget declaration, as required by law. The argument that non-filing was a condonable minor technical lapse was rejected. The Tribunal emphasized that under Rule 223B(2), non-filing of the declaration is sufficient grounds for confiscation of goods. The acceptance of the penalty by the manufacturers indicated their acknowledgment of the penal measures prescribed under the rule.

The Tribunal highlighted that penalty and confiscation are interconnected under Rule 223B(2), and once the penalty is accepted, confiscation follows. The fact that the stock matched the RG-1 balance was deemed immaterial for the confiscation under the rule. The manufacturers' plea of ignorance of the rule was dismissed, considering the Trade Notice issued by the jurisdictional Commissioner emphasizing compliance with the declaration requirement.

Ultimately, the Tribunal held that the Commissioner (Appeals) erred in setting aside the confiscation of goods. However, considering the circumstances, the redemption fine imposed was reduced while upholding the penalty. The order was modified to sustain the confiscation, reduce the redemption fine, and maintain the penalty, allowing the appeal in part.