2009 (8) TMI 1014 - AT - Central Excise

Summary

Issues involved: Appeal against confiscation of biscuits, imposition of redemption fine and penalty, irregular Cenvat credit, unauthorized goods storage, imposition of penalty on company director.

Confiscation of Biscuits and Imposition of Fine:
The appellant, engaged in biscuit manufacturing, appealed against the confiscation of 6002 boxes of biscuits and imposition of fines. Central Excise Officers found excess stock during a visit, with irregular Cenvat credit also detected. The appellant argued that the excess stock was due to space constraints in the store room, not for clandestine removal. The authorized signatory's statement supported this, stating goods were in finished condition. The Tribunal found the confiscation unjustified as the goods were stored in the packing hall due to lack of space in the store room, without intent for clandestine removal. Citing relevant case law, the Tribunal emphasized that confiscation should consider extenuating circumstances.

Imposition of Penalty on Company Director:
The penalty imposed on the company director was contested as the director was not directly involved in the day-to-day affairs of the factory where the irregularities occurred. The Tribunal noted the director's absence during proceedings and lack of evidence linking them to the factory's operations. Consequently, the penalty on the director was deemed unwarranted, and the appeal was allowed with consequential relief.

Conclusion:
The Tribunal modified the impugned order, setting aside the confiscation of biscuits and redemption fine while also overturning the penalty imposed on the company director. The decision was based on the lack of evidence linking the director to the factory's operations and the circumstances leading to the excess stock of biscuits.