Customs, Excise and Gold Tribunal - Bangalore
Garg Polypack (P) Ltd. vs C.C.E. on 14 December, 2005
Equivalent citations: 2006(106)ECC235, 2006ECR235(TRI.-DELHI), 2006(196)ELT87(TRI-DEL)
ORDER M.V. Ravindran, Member (J)
1. This is an appeal directed against the order-in-appeal dt.24.12.03 wherein confiscation of the goods not accounted was upheld and imposition of penalty was also upheld.
2. The relevant facts for consideration arise are that the Central Excise Officers conducted a physical stock verification of the raw-materials and the finished goods in the factory of the appellant and found that the stock of raw-material tallied but in the case of finished goods, there was an excess of goods in respect of two kinds of finished goods i.e. HDPE/PP Unlaminated Bags and HDPE/PP laminated bags. A SCN was issued for confiscation of these goods and imposition of penalty. The adjudicating authority vide his order-in-original dt.31.8.01 confiscated the goods but gave option for releasing the same on payment of redemption fine of Rs. 30,000/- and also imposed a penalty of Rs. 4,000/- on the appellants. On an appeal, the appellate authority upheld the order-in-original. Hence this appeal.
3. Ld. Consultant submits that the goods which were found in excess were a day's production of 19.12.2000 which remained to be entered on 20.12.2000 when the physical stock verification was done by the authorities. He submits that there is no allegation in the SCN in respect of intendment of the appellants to remove the goods clandestinely. In the absence of any such allegation, the confiscation and the imposition of penalty is wrong. He relies on the case law of Bhillai Conductors (P) Ltd. v. CCE, Raipur reported in 2000 (125) ELT. 781 (Tri). He also relies upon the case law of Delton Cables v. CCE, New Delhi reported in 2000(135) ELT 1092.
4. Ld. DR on the other hand submits that there is a absolute violation of the provisions in-as-much the appellants have not entered the day's production even according to their own submissions. He submits that once the goods are lying unaccounted in the factory premises this act itself points out that the appellant had intention to remove the goods clandestinely.
5. Considered the submissions made by both sides and perused the records. I find that the appellant had taken the plea that the goods seized and confiscated were a day's production. The officers of the Revenue entered the premises of the appellant on 20.12.2000 at 13.30 hrs. and found the stock in excess. The appellant's plea before the adjudicating authority that the goods which were found excess were a day's production, was not dealt by the adjudicating authority in details but were brushed aside with a single sentence stating that it was an after thought. It may be possible that the goods which were lying in excess would be a day's production, if that be so, it is only an error on the part of the appellant not to account for the same in the records. Further, I also find, that, in the SCN, there is no allegation that these goods which were found excess were intended to be removed clandestinely. In the absence of any such allegation in the SCN, it could not be considered that there was mens rea on the part of the appellant for not accounting the same.
6. In the Bhilai Conductors (P) Ltd., (supra) the Tribunal has held:
Confiscation - Accountal of goods - Confiscation not attracted by mere non-accountal of goods in RGI when there is no evidence that such non-accountal of goods still in the factory was with intent to evade payment of duty - Rule 173Q being a penal clause intention in-built in it and hence mens rea an essential ingredient to attract this clause - Rule 173Q(1)(b) of Central Excise Rules to be read in conjunction and not in isolation with other provisions of Rule 173Q.
7. In view of the above said facts and circumstances. I find that the confiscation of the goods and option for redemption fine is not correct and is liable to be set aside.
8. But at the same time, the appellants have not made any entries in the RGI record which is violation of the provisions and they are liable for imposition of penalty under Rule 226 of the Central Excise Rules, 1944. Since the said Rule 226 imposes maximum penalty of Rs. 2000. I feel that the penalty of Rs. 2000/- is to be imposed on the appellants under Rule 226.
9. The order-in-appeal is set-aside and modified to the extent as above. Appeal allowed partly.
Order dictated in the open Court.