2015 (6) TMI 1072 - AT - Central Excise

Imposition of penalty - Rule 25 of the Central Excise Rules 2002 - non-availability of daily stock account in the factory - records not maintained - Held that - it is seen that there is no allegation of clandestine removal of goods from the factory by the appellant. The only allegation leveled against the appellant by the authorities below is that daily stock account as provided under Rule 10 of the Central Excise Rules 2002 has not been maintained by the appellant. Since the goods have not been removed from the factory and in view of the fact that the stock accounts have been maintained which at the material time was available with the Chartered Accountant of the appellant company the allegation leveled against the assessee justifying confiscation of goods and imposition of penalty are not legal and proper supported by the judgment of Hon ble High Court in the case of CCE vs Saurasthra Cement Ltd 2010 (9) TMI 422 - GUJARAT HIGH COURT and Supreme Industries Ltd. vs CESTAT New Delhi 2007 (5) TMI 25 - HIGH COURT, MADHYA PRADESH that in absence of fraud collusion suppression with intent to evade payment of duty penalty cannot be imposed under Rule 25 ibid. Therefore confiscation of goods and imposition of penalty under Rule 25 of the Central Excise Rules 2002 read with Section 11 AC of the Central Excise Act 1944 are not in conformity with the statutory provisions. - Decided in favour of appellant

Summary

Issues:
Appeal against penalty imposed under Rule 25 of Central Excise Rules, 2002 for non-maintenance of daily stock account.

Analysis:
The case involved an appeal against a penalty imposed under Rule 25 of the Central Excise Rules, 2002 for not maintaining a daily stock account. During an inspection, Central Excise Officers found the absence of the daily stock account at the factory premises, leading to the seizure of goods and subsequent issuance of a Show Cause Notice (SCN) seeking confiscation of goods and penalty imposition. The SCN was adjudicated resulting in the confiscation of goods and a penalty of Rs. 43,875. The appellant appealed to the Commissioner (Appeals), who upheld the penalty. The appellant argued that they did maintain a daily production account, and the stock register was temporarily unavailable as it was with their Chartered Accountant for VAT returns preparation. The Commissioner (Appeals) acknowledged the maintenance of records by the appellant but still confirmed the penalty. The appellant cited judgments to support their stance that penalty imposition was unwarranted without intent to evade duty. The Revenue Respondent supported the penalty imposition. The Tribunal found no evidence of clandestine removal of goods and noted that the stock account was available with the Chartered Accountant. Relying on precedent judgments, the Tribunal concluded that in the absence of fraudulent intent, penalty under Rule 25 could not be justified. Consequently, the Tribunal set aside the impugned order, ruling in favor of the appellant.