Customs, Excise and Gold Tribunal - Delhi
Snack Foods (P) Ltd. vs Collector Of Central Excise on 4 June, 1987
Equivalent citations: 1987(12)ECR883(TRI.-DELHI), 1987(31)ELT231(TRI-DEL)
ORDER D.C. Mandal, Member (T)
1. By the impugned order, Additional Collector of Central Excise, Chandigarh has confiscated Biscuits weighing 13,783.740 Kgs. valued Rs. 1,41,367.82 found in excess over and above the recorded balance shown in R.G.I Register, with redemption fine of Rs. 10,000.00, imposed a penalty of Rs. 10,000.00 on the appellants and confirmed the demand for Central Excise duty amounting to Rs. 165.27 on the goods found short at the time of verification of the stock on 1-2-1984. In the impugned order, the Additional Collector has held, inter-alia, as follow :-
"From the submissions made by the penalty that they could not make entries of the finished goods in the R.G.I Register upto date due to negligence and heavy work load, the quantity lying in the finishing room packed in gunny bags and polythene bags had not yet reached the stage warranting its accountal in the R.G.I Register as the biscuits are not marketed in that condition, the omissions were merely in the nature of a clerical lapse and the seized goods do not merit confiscation on account of this simple and innocent lapse are not accepted.
I observe that the quantity of biscuits lying in the finished room for which the penalty has claimed that it had not reached the stage warranting its accountal in R.G.I Register Js not correct. A majority of the goods loaded in the truck were packed in polythene bags at the time of the visit of the Central Excise party. Even otherwise its mention should have been made in Column No. 15 in the R.G.I Register meant for the goods lying in the finished room, since R.G.I Register is a basic document. Further actual removal of finished goods shall have to be made after necessary entries are made in R.G.I Register, which the party failed to do so. Moreover this is not the only lapse on the part of the party but there is still more serious act of omission of loading the truck with finished goods manufactured by them, without their accountal in the R.G.I Register and without the cover of a gate pass. Neither the issuance of gate passes since 28-1-1984 nor making debit entries in PL A in this regard can absolve the party of the breach of statutory duty of making entries in the R.G.I Register. Actual removals of goods shall have to be made in R.G.I Register. It is not an unknown practice to clear goods more than once on the strength of the same gate pass and the possibility of making use of the single gate pass for clearing goods more than once cannot be altogether ruled out."
2. I have heard Shri Bhangoo, learned Advocate for the appellants and Smt. Nisha Chaturvedi, learned SDR for the respondent. Shri Bhangoo has argued that on 1-2-1984 Central Excise Officers, during visit of the factory, found 13,783.740 Kgs. biscuits valued at Rs. 1,41,367.82 in excess over and above the recorded balance shown in R.G.I Register. They also found short, biscuits valued at Rs. 1,573.95 involving duty of Rs. 165.27. Part of the excess quantity mentioned above was found loaded on a truck standing in the factory premises. He has stated that entries in R.G.I Register in respect of the goods found excess could not be made due to rush of work. Those were production for the period from 28-1-1984 to 1-2-1984. Some of the goods, vide Annexure A-7 enclosed to the appeal memorandum, valued at Rs. 46,809.12 was packed on 1-2-1984 and were to be accounted for in the R.G.I Register on the close on that date, but the adjudicating authority has confiscated the said goods although those were not involved in the contravention of the provisions of the Central Excise Rules. He has drawn my attention to Serial No. 1 of Annexure-A to the Seizure Memo which shows that 2897.160 Kgs. of Milk Glucose biscuits were packed in polythene bags, but those were to be packed in card board boxes. Therefore, this quantity was not fully manufactured and was not to be included in R.G.I Register. Drawing my attention to Serial Nos. 4 to 10 of the said Annexure-A to the Seizure Memo, learned Advocate has stated that total quantity of biscuits as per those serials, namely, 709 Kgs. valued at about Rs. 7,000.00 were in gunny bags and they were not packed and were not in saleable condition. Inviting my attention to Item 9 of the Seizure Memo, he has also stated that Delivery Order Books were seized by the Central Excise Officers. The goods found the Truck were fully covered by the Orders of the Customers. This proves that there was no malafide on the part of the appellants. The imposition of redemption fine and penalty of such heavy amount of Rs. 10,000.00 each was not warranted in the facts and circumstances the case.
3. Arguing for the respondent, Smt. Chaturvedi stated that goods loaded in the Truck were not accounted for in R.G.I Register. The unit packing of the biscuits was in polythene. As a Licensee the appellants have not discharged their responsibility. She has stated that imposition of redemption fine and penalty in this case is fully justified.
4. I have considered the records of the case and the arguments of both sides. The case of the Department is that the appellants did not account for in the R.G.I Register a total quantity of 13,783.740 Kgs. biscuits valued at Rs. 1,41,367.82, a portion of which was loaded in the Truck for removal from the factory. The second charge is that the goods valued at Rs. 1573.95 involving central excise duty of Rs. 165.27 were found short. Annexure - A-7 to the appeal memorandum shows that the goods valued at Rs. 46,809.12 was produced on 142-1984. Those were to be accounted for in R.G.I Register in course of the day. The appellants have not, therefore, contravened the provisions of Central Excise Rules by not entering them in the R.G.I Register by the time the Officers arrived at the factory. Serial Nos. 4 to 10 of Annexure-A to the Seizure Memo show that goods weighing 709 Kgs. were in gunny bags. The Department has not produced any material to show that Biscuits manufactured by the appellants in the factory were also being cleared in the gunny bags. In the absence of such materials, the contention of the appellants that this quantity of biscuits were not packed and were not in saleable condition has to be accepted. In respect of Serial No. 1 of Annexure-A to the Seizure Memo, it is found that the goods were in polythene bags, is also an admitted fact that the goods found loaded in the Truck were in the polythene bags. The learned Advocate has not produced any evidence to prove that this quantity was to be packed in the card board boxes. In the absence of any such evidence, I am unable to accept his contention. He has stated that the goods found loaded on the truck were covered by the orders of the customers, but this does not dispense with the requirement of accounting for the production and clearances of the goods in the R.G.I Register. This Register is an important statutory record prescribed, inter alia, for prevention of clandestine removal of the goods. Omission to maintain this register properly is a serious lapse and should not be viewed lightly. Rule 173Q(1) of the Central Excise Rules provides that excisable goods which are not accounted for or which are removed in contravention of any provision of the Central Excise Rules are liable to confiscation and manufacturer thereof is liable to penalty not exceeding three times the value of the excisable goods which are not accounted for in the statutory records or which are removed in contravention of the provisions of the] Rules. In the present case, by not accounting the biscuits produced prior to 1-2-1984 in Rule 1 Register, the appellants have made them liable to penal action and those goods were also liable to confiscation under Rule 173Q of the Central Excise Rules. Action of the Additional Collector in confiscating the goods produced prior to 1-2-1984 and not accounting for in R.G.I Register was, therefore, in order, except the goods weighing 709 Kgs. vide Serial Nos. 4 to 10 of Annexure-A to the Seizure Memo. In the result, confiscation of the goods valued at Rs. 46,809.12 vide Annexure A-7 to the Appeal Memorandum and goods weighing 709 Kgs. vide Serial Nos. 4 to 10 of Annexure-A to the Seizure Memo is set aside and confiscation of the other seized goods is upheld.
5. In view of the above discussions and having regard to the value of the goods found not accounted for and the fact that out of the unaccounted goods, the goods shown in Annexure K-7 to the Appeal Memorandum valued at Rs. 46,809.12 and the goods weighing 709 Kgs. shown against Serials Nos. 4 to 10 of Annexure-A to the Seizure Memo were not liable to confiscation, I reduce the redemption fine from Rs. 10,000.00 to Rs. 5,000.00 (Rupees five thousand only) and also reduce the penalty from Rs. 10,000.00 to Rs. 5,000.00 (Rupees five thousand only).
6. The impugned order is modified in the above terms.