1998 (5) TMI 205 - AT - Central Excise

Summary

Issues:
Violation of Rule 47 of the Central Excise Rules, 1944 - Seizure of wall tiles - Confiscation of seized tiles - Duty demand on tiles cleared without payment - Imposition of penalty - Liability to confiscation of goods found outside temporary BSR - Application for permission to store goods outside BSR - Reduction of penalty amount.

Analysis:

The case involved a visit by Central Excise Officers to the factory of the appellants, who were manufacturers of wall tiles and floor tiles. During the visit, it was discovered that certain statutory records were not updated, and there were discrepancies in the production and storage of tiles. Subsequently, a show cause notice was issued proposing duty levy on tiles cleared without payment, confiscation of seized tiles, and imposition of penalties. The adjudicating authority upheld the liability to confiscation of seized tiles and imposed various financial obligations on the appellants, including enforcement of bonds and bank guarantees, duty demands, penalties, and interest under the Central Excise Act, 1944.

The appellants appealed the decision, mainly contesting the liability to confiscation of the tiles found outside the temporary BSR. They argued that they had applied for permission to store goods outside the BSR, which was granted after the seizure. However, the authorities maintained that the goods were liable for confiscation due to the delay in seeking permission and the significant quantity of tiles involved, which exceeded the production capacity for a month. The appellate tribunal agreed with the adjudicating authority's reasoning and upheld the liability to confiscation for the tiles found outside the temporary BSR.

After thorough consideration of the arguments and evidence presented, the tribunal upheld the impugned order but decided to reduce the penalty imposed on the appellants from Rs. 5 lakhs to Rs. 3.5 lakhs. The tribunal confirmed the decision regarding the liability to confiscation of the seized tiles found outside the temporary BSR and rejected the appeal, subject to the modification in the penalty amount. The judgment emphasized the importance of timely compliance with regulations and the consequences of non-compliance in excise matters, highlighting the need for manufacturers to adhere to statutory requirements to avoid penalties and confiscation of goods.