1997 (11) TMI 319 - AT - Central Excise

Summary

Issues: Violation of Central Excise Rules - Storage of excisable goods outside approved bonded store room, failure to maintain statutory records properly, imposition of fine and penalty.

In this case, the appellant challenged the Order-in-Appeal passed by the Commissioner (Appeals), Ghaziabad, which partially allowed their appeal but retained a fine of Rs. 40,000/- and a penalty of Rs. 25,000/- on them for contravening Rules 53 and 173G of the Central Excise Rules, 1944. The Additional Commissioner of Central Excise, Ghaziabad, found that the appellant stored excisable goods outside the approved bonded store room and failed to keep statutory records properly, leading to unaccounted goods found during inspection. The adjudicating authority appropriated Rs. 80,000/- from the bond executed by the appellant and imposed a penalty of Rs. 50,000/- under Rule 173Q. The Commissioner (Appeals) reduced the amounts, prompting the appellant to file the present appeal challenging the Order-in-Appeal.

The appellant's counsel argued that due to market conditions and a full bonded store room, the appellant stored goods outside without seeking permission, as they were new licensees unfamiliar with the Central Excise law requirements. The counsel contended that there was no intent to evade duty, and the failure to update the statutory records was a bona fide mistake. On the other hand, the Departmental Representative argued that the fine and penalty were justified considering the circumstances and the duty involved. The Tribunal found that the storage of goods outside the approved bonded store room violated Rule 53, and since the goods were not accounted for, penal action under Rule 173Q was warranted. However, acknowledging the lack of intent for clandestine removal and the space constraints, the Tribunal reduced the fine to Rs. 10,000/- and the penalty to Rs. 5,000/-. The Tribunal modified the Order-in-Appeal accordingly, partially allowing the appeal.

In conclusion, the Tribunal upheld the violation of Central Excise Rules regarding the storage of goods outside the approved bonded store room and failure to maintain proper records. While acknowledging the lack of intent for evasion, the Tribunal reduced the fine and penalty considering the circumstances. The appeal was partially allowed, and the Order-in-Appeal was modified to reduce the financial liabilities imposed on the appellant.