COMMISSIONER Vs. VIDHYA CYLINDER PVT LTD

JUDGEMENT

(1.) This is an appeal preferred under Section 35-G(1) of the Central Excise Act, 1944. The facts which are essential to be stated are that the respondent, M/s Vidhya Cylinder Pvt. Ltd., Mandideep, Dist. Raisen, a manufacturer of LPG cylinders which is covered under Section 73.11 of the Central Excise Tariff was raided by the Department on 2111- 1997 and eventually the Assistant Commissioner, Central Excise, Division-II, Bhopal came to hold that the seized goods were liable for confiscation. Because of the aforesaid conclusion and taking note of the fact that the goods have been provisionally released and not available for confiscation, Commissioner appropriated the bank guarantee furnished by the respondent at the time of provisional release of the goods. In addition, the Commissioner imposed a penalty of Rs.50,000/-under Rule 173-Q of the Central Excise Rules, 1944. After imposition of penalty the respondent opted for KVSS Scheme and filed a declaration for the same, Annexure-E, on 28-12-1998. Under the said Scheme it paid Rs.25,000/-to the Department.

(2.) After settlement the respondent filed a claim petition for refund of Rs.1 lakh in respect of the bank guarantee which had been appropriated by the Assistant Commissioner. The authority of the first instance rejected the said claim on the ground that the bank guarantee was appropriated by the adjudicating authority in the original order and the same had not been appealed by the respondent before the Commissioner (Appeals). It is worth noting the appeal preferred before the Commissioner (Appeals) was withdrawn by the respondent in view of the settlement made by it as regards imposition of penalty. In this backdrop, the Assistant Commissioner observed that KVSS Scheme was taken recourse to by the respondent for the purpose of settlement of penalty amount and the amount appropriated prior to the filing of declaration under KVSS Scheme was out of the purview of the scheme.

(3.) Being grieved by the aforesaid order the respondent preferred an appeal before the Commissioner (Appeals) Customs & Central Excise, Bhopal which addressed itself to the submissions made on behalf of the respondent and eventually in paragraph 6 of its order came to express the opinion as under: