Customs, Excise and Gold Tribunal - Calcutta
M/S. Panihati Rubber Ltd. vs Cce, Kolkata-Iii on 4 January, 2001
Equivalent citations: 2001(131)ELT344(TRI-KOLKATA)
ORDER
Smt. Archana Wadhwa.
1. The present appeal is against the order passed by the Commissioner of Central Excise vide which he has confiscated the finished goods with an option to the appellant to get the same redeemed on payment of redemption fine of Rs.1 lakh on the ground that at the time of visit of the officers in the appellants' factory, the said goods were not entered in their RG-1 record. A personal penalty of Rs.2 lakhs has also been imposed upon the appellants under the provision of rule 173Q of Central Excise Rules.
2. The appellants' factory was visited by the central excise officers on 12.9.97, who conducted various checks and verifications. Certain shortages and excesses were noticed by the visiting officers. The statement of works manger of the appellant company Shri A.K.Ghosh was recorded. On the above basis the appellants were issued a show cause notice on 9.3.98 raising demand of duty on the goods found short and proposing to confiscate the excess found goods and to impose penalty upon the appellants. During the course of adjudication, the dispute relatable to the duty allegedly short paid by the appellant was resolved under the provision of Kar Vivad Samadhan Scheme. As such the present impugned order deals only with the excess found goods.
3. I have heard Shri Nitin Jain, ld.consultant appearing for the appellant and Shri R.K.Roy, ld.JDR for the Revenue. The appellants had contested before the adjudicating authority that the goods at the time of seizure were under process and were pending inspection of the Railway inspecting authority, for whom the goods are produced. It is submitted that till the inspection is completed by the inspecting authority of the railways and the goods are passed by such authority, they are not considered to be fully manufactured goods by the appellants and are not accounted in their RG-1. It has also been argued that the goods in question are produced as per railway design and specification and are used only by the railways and wagon builders. As such the goods do not have any readymade market and cannot be disposed of clandestinely. Ld.consultant has also argued that the goods were still in the factory premises and there is no evidence to suggest that the appellant had intention to remove the same without payment of duty. Reliance in support of his above submissions has been placed on a number of decisions of the Tribunal.
4. On the other hand Shri Roy contends that the verification of the stock took place with the assistance of the appellants' representative, who signed the stock verification report without any protest. The plea that the goods were not inspected and as yet had not reached RG-1 stage is an afterthought on the part of the appellants.
5. After giving my careful consideration to the issue involved I find force in the appellants' submission. Undoubtedly the goods were still within the factory premises and the only allegation is that the same were not entered in RG-1 register. The appellants during the course of adjudication have strongly pleaded that the goods in question were awaiting inspection by the railway authorities. Such plea of the appellant has not been rebutted by the adjudicating authority by inspecting the goods, but has been dismissed lightly by observing that no such objection was raised by the appellant at the time of sei(SIC)use of the goods. I find that in the absence of any proper enquiry to pin down the appellant to any definite specific irregularity or int eh absence of any evidence to reflect upon the mala fide intention of the appellant to clear the goods without payment of duty, the benefit of doubt has to be extended to them by accepting that the goods in question were not tested till the time of the visit of the officers and as such were not ripe for their entry in RG-1 record. The goods were also still in the factory premises and from the mere fact of their non-entry in the RG-1 it cannot be inferred that the same were meant for clearance without payment of duty. In these circumstances I hold that the confiscation of the goods and imposition of penalty upon the appellant on this score deserves to be set aside. The appeal is accordingly allowed with consequential relief to the appellants.