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2014 (12) TMI 1033 - AT - Central ExciseNon following the procedure for sending the goods for Job work and receiving the goods back after processing - use of private challans - voilcation of rule 57 F(6) (i) rule 57F(4), Rule 57F(6)(ii), 57F(7), Rule 9(1), rule 53, rule 173F, rule 173G(4) indicating that goods cleared for job work have to be accompanied by proper job work challans - Confiscation of goods - Penalty u/s 11AC - Held that:- Detailed procedure has been laid for job work or clearance of inputs/ partially processed inputs, reversal of credit on clearance and availment of credit on receipt back of goods to the factory. Admittedly these procedures have not been followed and further no duty has been paid/reversed by the respondents towards removals for job works in contravention of rule 57F(6) (1). There is clear admittance by the Director of the company that they have not followed the procedure and removals have effected without following laid down procedure, it is evident that benefit of job work could not be extended only based on verification report of Assistant Commissioner that goods have come back to the factory, knowingly well that private Challans have been used and no records have been maintained. In absence of maintains of records in the factory, and non-intimation to the Central Excise authorities no co-relation was possible. - Decided in favor of revenue. Regarding demand of duty on clearance of castings without following job work procedure, I do not find force in revenue s appeal as they have already accepted that all goods have came back. Once revenue itself is satisfied, no question of demanding duty arises. Of course, for violation of job work procedure and non-reversal of 10% of the value, penal provisions are attracted. However I do not agree with revenue for imposition to equal penalty considering that appellants were not aware about correct procedures. No mens-rea has been imputed manifesting their intention to defraud the revenue knowingly, thus equivalent penalty is not justifiable. - From the facts as brought on record it is observed that a very casual approach has been adopted by the appellant. Accordingly, I consider that penalty has to be imposed on appellants to ensure that the legal provisions are not ignored rendering these provisions as redundant. Regarding other issue of dropping demand and not imposing any fine and penalty on seized goods, I find that non-recording of goods in excise records has been manifested and admitted by the partner. For non-accountal, no lenient view could be taken. Goods were rightly liable for confiscation and redemption fine and penalty imposable. Commissioner (Appeals) was not right in dropping demands and penalties on this account. Departmental appeal is liable to be accepted. Non-recording of goods in excise records has been manifested and admitted by the partner. For non-accountal, no lenient view could be taken. Goods were rightly liable for confiscation and redemption fine and penalty imposable. Commissioner (Appeals) was not right in dropping demands and penalties on this account. - Penalty imposed on Director - Decided partly in favour of Revenue.
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