1988 (3) TMI 199 - AT - Central Excise

Summary

Issues: Alleged clandestine production and removal of excisable goods, failure to obtain prior approval of price list, imposition of penalty.

The judgment pertains to a case where the appellants informed the Central Excise Department about suspending production of V.C.Rs but were later found to have produced and cleared 50 sets of V.C.Rs without obtaining prior approval of the revised price list. The department alleged a short levy due to the lower price at which the goods were cleared. The matter was adjudicated ex-parte as the appellants failed to respond to the Show Cause Notice. The appellants argued that they had submitted the revised price list by post and subsequently cleared the goods after discharging the duty liability as per the revised price list. They also cited legal precedents to support their case.

The appellants contended that the failure to obtain prior approval of the price list was a technical violation and did not warrant the imposition of a penalty of Rs. 25,000. They relied on legal decisions to argue that the alleged contravention of rules was not intentional and did not amount to evasion of duty. The department reiterated its stance taken before the lower authority.

The Tribunal observed that the appellants' actions of resuming production and clearance of goods without obtaining prior approval of the price list constituted a contravention of rules. The appellants' submission of documents as evidence of prior intimation was deemed insufficient to absolve them of the violation. The Tribunal held that the appellants were guilty of contravening Rules 43 and 173C and could not rely on legal precedents cited. However, it noted that the goods were cleared on payment of duty, indicating no evasion of duty.

The Tribunal acknowledged that the appellants were operating under the Self Removal Procedure, emphasizing the importance of strict compliance with excise laws and procedures. Despite reducing the penalty from Rs. 25,000 to Rs. 5,000, the Tribunal concluded that the technical violation of rules could not be disregarded, although there was no evidence of an attempt to evade duty. The appeal was partly allowed, considering all the facts and circumstances of the case.