2005 (5) TMI 573 - AT - Central Excise

Summary

Issues:
Clandestine removal of goods without payment of duty, imposition of personal penalty equivalent to duty, confiscation of excess found goods, payment of duty before issuance of show cause notice.

Analysis:
1. The appellants, engaged in manufacturing man-made fabrics, were found with torn Central Excise invoices and excess finished goods during a visit by Central Excise Officers. Statements revealed clearance of processed fabrics without duty payment, leading to proceedings initiated via a show cause notice.

2. The show cause notice resulted in an order confirming duty demand, personal penalty imposition, and confiscation of excess fabrics. The Director faced a penalty of Rs. 20,000. On appeal, the Commissioner reduced the personal penalty to the duty amount of Rs. 91,935, leading to the current appeal.

3. The appellant's advocate did not contest the duty demand for clandestine removal but argued against penalty imposition under Section 11AC, citing precedents where duty payment before the notice precluded penalty. The advocate also disputed the confiscation of excess goods due to non-removal and clerical errors.

4. The Revenue representative justified the personal penalty equivalent to duty due to admitted clandestine removal. The confiscation was supported by evidence of duplicate invoices with the same serial numbers, indicating an intention to evade duty payment.

5. The judgment confirmed the duty demand as uncontested but set aside the personal penalties based on legal precedents. The confiscation of excess goods was upheld due to the appellant's intention to remove goods without duty payment, supported by the duplicate invoices and lack of record entry.

6. The redemption fine of Rs. 1.75 lakhs for the confiscated goods valued at over Rs. 8 lakhs was deemed reasonable and confirmed. The duty and redemption fine were upheld, while the penalties on both appellants were annulled, concluding the appeals.

This detailed analysis covers the issues of clandestine removal, penalty imposition, confiscation of goods, and duty payment timing, as addressed in the legal judgment by the Appellate Tribunal CESTAT, Mumbai.