D.P. Bansal Vs. Commissioner of Central Excise

D.P. Bansal vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Nov 24, 2004

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Citation: sooperkanoon.com/37173
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Judge: M T K.C.
Decided On: Nov 24, 2004
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

D.P. Bansal

Respondent

Commissioner of Central Excise

Legal References

Reported In: (2005)(99)ECC582

Excerpt

.....fine to rs. 50,000/- and reduced the penalty amount to rs. 5,000/-. he dropped the demand of rs. 1,48,435.86.2. in their appeal, the appellants have pleaded that the commissioner (appeals) has rectified the order of the adjudicating authority who ordered confiscation, of the goods, which was not subject matter of the appeal and has exercised the powers of adjudication to uphold the deficient order of adjudicating authority. in para 9.6 of his order, the commissioner (appeals) has adjudicated that there is no manifest violation of rule 57gg but in para 9.7 he held that there is violation of rule 57gg. when there is no manifest violation of rule 57gg there is no question of confiscation of the goods and imposition of penalty. in para 9.14, he reduced the redemption fine to rs. 50,000/- and penalty to rs. 5,000/-. however, in para-10(ii), penalty of rs. 50,000/- is reduced to rs. 10,000/-. this is in variance to para 9.14 where the penalty has been reduced to rs. 5,000/-. therefore, they prayed that order of confiscation of the goods and imposition of redemption fine of rs. 50,000/- penalty may also be vacated. under their letter dated 5-10-2004, the appellants requested for deciding the appeal on merits.3. shri v. valte, ld. sdr appearing for the revenue pleaded that the appellants are a registered dealer and they are required to follow the obligations placed on them under rule 57gg of the central excise rules, 1944. according to rule 57gg(3), the registered person is liable to maintain rg-23d register at the end of day of receipt and issue of excisable goods correctly in the manner required under central excise-rules: since the appellants were not keeping the correct records of the goods received and issued by them, the penalty was correctly imposed on the appellants. the goods which were found unaccounted for were also correctly held to be liable for confiscation. since the seized goods were released provisionally under bond, redemption fine was correctly.....

Full Judgment

1. The appellants are a registered dealer for issuing invoices for duty-paid goods purchased by them under the invoices issued either by the manufacturer or by other dealers. The Central Excise officers on 10/11-5-1996 verified the stock of various goods in their registered premises and found the excess stock of 112.14 MT of M.S. Rounds and M.S. Angle and Joist, which was seized for violation of Rule 57GG of Central Excise Rules, 1944. The officers also found shortages in the stock of some other goods. Show cause notice was issued to the appellants for recovery of central excise duty of Rs. 1,48/435.86 on 114.562 MT of M.S. Channels, M.S. Bars, M.S. Flats and M.S. Plates found short and for confiscation of the excess stock besides imposition of penalty. The Dy. Commissioner adjudicated the show cause notice holding the excess stock liable for confiscation and ordering a fine of Rs. 5 Lakhs in lieu of confiscation and appropriated Rs. 10,000/- from the security furnished for provisional release of goods to recover this amount. He also demanded central excise duty of Rs. 1,48,436/- on shortage of 114.56 MT of M.S. Channels, M.S. Bars, M.S. Flats and MS Plates. He also imposed a penalty of Rs. 50,000/- on the appellants. On appeal, the Commissioner (Appeals) confirmed the liability of confiscation of the seized goods but reduced the redemption fine to Rs. 50,000/- and reduced the penalty amount to Rs. 5,000/-. He dropped the demand of Rs. 1,48,435.86.

2. In their appeal, the appellants have pleaded that the Commissioner (Appeals) has rectified the order of the adjudicating authority who ordered confiscation, of the goods, which was not subject matter of the appeal and has exercised the powers of adjudication to uphold the deficient order of adjudicating authority. In para 9.6 of his order, the Commissioner (Appeals) has adjudicated that there is no manifest violation of Rule 57GG but in para 9.7 he held that there is violation of Rule 57GG. When there is no manifest violation of Rule 57GG there is no question of confiscation of the goods and imposition of penalty. In para 9.14, he reduced the redemption fine to Rs. 50,000/- and penalty to Rs. 5,000/-. However, in para-10(ii), penalty of Rs. 50,000/- is reduced to Rs. 10,000/-. This is in variance to para 9.14 where the penalty has been reduced to Rs. 5,000/-. Therefore, they prayed that order of confiscation of the goods and imposition of redemption fine of Rs. 50,000/- penalty may also be vacated. Under their letter dated 5-10-2004, the appellants requested for deciding the appeal on merits.

3. Shri V. Valte, ld. SDR appearing for the Revenue pleaded that the appellants are a registered dealer and they are required to follow the obligations placed on them under Rule 57GG of the Central Excise Rules, 1944. According to Rule 57GG(3), the registered person is liable to maintain RG-23D register at the end of day of receipt and issue of excisable goods correctly in the manner required under Central Excise-Rules: Since the appellants were not keeping the correct records of the goods received and issued by them, the penalty was correctly imposed on the appellants. The goods which were found unaccounted for were also correctly held to be liable for confiscation. Since the seized goods were released provisionally under bond, redemption fine was correctly imposed in view of ratio of Supreme Court decision in case of Weston Components Ltd. v. CC, New Delhi [2000 (115) E.L.T. 278 (S.C.)]. He agreed that penalty was reduced to Rs. 5,000/- as in para 9.14 but wrongly typed in para 10(ii).

4. I find that the adjudicating authority in his order in para 18(i) has given a finding that "it is held that the stock of MS Rounds weighing 29.113 MT and MS Angle & Joist weighing 83.027 MT valued at Rs. 18.56 lakhs seized by the Central Excise Officers on 10-5-1996 found unaccounted are held to be liable for confiscation. However, it is noticed that the goods have already been provisionally released to the party on execution of B-11 (security) Bond for full value of goods i.e. Rs. 18.56 Lakhs along with security of Rs. 10,000/- in the form of DRC No. 7122588. dated 24-5-1996. Therefore, the said goods are not available for confiscation. Thus, in the absence of goods being available for confiscation and in view of the above facts and circumstances of the case, a sum of Rs. 5 Lakhs is ordered to be recovered from the party in lieu of the confiscation." The Commissioner (Appeals) in his order in para-10(i) has observed that the seized goods are ordered to be confiscated. The appellants are directed to produce before the adjudicating authority the seized goods for confiscation, which were released provisionally on execution of bond. The appellant can redeem the goods on payment of redemption fine of Rs. 50,000/-.

However, if the appellant fails to produce the goods for confiscation, then it would be considered that they have opted to redeem the same on payment of Rs. 50,000/- and they shall pay this amount in lieu of confiscation. Thus, I find that prima facie both the authorities have held that the goods are liable for confiscation and since these goods were released provisionally on execution of a bond, therefore, a fine should be recovered from the appellant in lieu of confiscation. The Commissioner has not modified the order of the original authority as claimed by the appellants regarding the liability of confiscation of the goods. The goods released provisionally under bond are liable for confiscation and fine in lieu of confiscation was correctly imposed in view of Supreme Court decision in case of Weston Components Ltd. v.Commissioner of Customs, New Delhi (supra). Regarding the claim of the appellant that there is difference in the amount of penalty in para 9.14 where it was reduced to Rs. 5,000/- but in para 10, it is reduced to Rs. 10,000/-, I find that there is an apparent contradiction.

Therefore, the amount of penalty, which has been reduced to Rs. 5,000/- after detailed discussion in para 9.14, is the correct amount and in para 10(ii), the penalty amount is not correctly shown. Accordingly, the penalty amount is Rs. 5,000/- only, as stated in para 9.14 of the Commissioner's (Appeals) order. The penalty has been correctly imposed on the appellants.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties D.P. Bansal vs Commissioner of Central Excise Same Subject Excise Same Judge M T K.C.