Customs, Excise and Gold Tribunal - Mumbai
Bombay Drugs And Pharmas Ltd. (Now Known ... vs Commissioner Of Customs And Central ... on 26 July, 2004
ORDER Moheb Ali M., Member (T)
1. This appeal arose out of the order of the Commissioner (Appeals) who in the impugned order upheld the order of the lower authority.
2. Briefly the facts are that the appellant is engaged in the manufacture of drugs falling under falling under Chapters 28 and 29 of the Central Excise Tariff Act, 1985. During the course of stock taking of finished excisable goods manufactured by the appellant it was found that several quantities of goods as mentioned in the show cause notice were found in excess of the balance shown in the statutory records, i.e. RG-1 register. The explanation given for such non-accountal of the goods was that it is due to mistake on the part of staff employed by the appellant. The appellant admitted the mistake. The said goods were seized by the department. The lower adjudicating authority ordered confiscation of the goods not so accounted, imposed personal penalty of Rs. 50,000/- under Rule 173Q(i) and Rule 226 of the Central Excise Rules and also imposed a penalty of Rs. 10,422/- on the production manager under Rule 209A. In appeal, the Commissioner (Appeals) upheld the order of the lower authority by relying on several judicial pronouncements on the issue of non-accountal in RG1.
3. The learned advocate argued that it is not the fact that the appellant did not appear for a personal hearing before the lower appellate authority. The production manager who admitted to have not accounted for the goods was not conversant with the excise law and so his statement should not have been relied upon to confiscate the goods. He also pleaded that the goods were meant for export and in fact the same were subsequently exported as is clear from the AR4 filed by the appellant There was no intention to remove the goods not accounted. The goods should not have been confiscated as they are still available in the factory premises. He relied upon the case of Garden Silk Mills Lid. v. CCE 1991 (51) ELT 373. He also argued that no penalty should have been imposed under Rule 173Q of the erstwhile Central Excise Rules.
4. I have considered the various submissions. It is a fact that the goods manufactured by the appellant were not accounted for in the RG1 register as the panchnama clearly shows this fact. Initially, it was admitted that it was a mistake. Under self-removal procedure, one of the fundamental requirements is to account for the goods produced by an assessee. Such non-accountal would defeat the very purpose of control over an assessee. Statutory records have to be maintained in the manner prescribed. The fact that the goods have not been removed from the factory does not mean that they are not liable to confiscation once it is established that the goods have not been accounted. However, having regard to the fact that the goods were meant only for export and they were in fact exported after they were provisionally released, I reduce the fine to Rs. 10,000/- and the penalty to Rs. 5,000/-. Since the goods are exported, the question of payment of duty does not arise.
5. The appeal is thus partly allowed.
(Operative part pronounced in court)