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2021 (7) TMI 97 - AT - Central ExciseClandestine manufacture and clearance - Cigarettes - non accountal of goods in RG-I register - physical control as per the Central Excise law or not - HELD THAT:- It is found that only for not finding the statutory register being RG-I and Form-4 at the time of inspection by the Officers of DGCEI, adverse inference have been drawn without reference to the records of the appellant available with the Department, being the various returns filed from time to time and the inspection reports available on record. Admittedly, the audit has taken place in the factory premises of the appellant on 20.05.2013, which is four days before the date of search or inspection by the DGCEI. There is no adverse report on record by the Officers of the Audit team nor there is any whisper of any discrepancy in the stock of finished goods and raw material with respect to the quantity entered in the statutory register. There are no instance of clandestine clearance or attempt to clear clandestinely have been brought on record. Thus, there is absence of mens rea or any attempt by appellant to clandestinely clear the finished goods lying in the factory as on the date of inspection or at any point of time. This Tribunal have repeatedly held that any finished goods found not entered in the RG-I register on the date of inspection, are not liable for confiscation in absence of any finding of attempted clandestine removal of the excisable goods. Further, raw material which was found lying in the factory of the appellant was admittedly not manufactured by the appellant and as such the same is not dutiable in the hands of the appellant. Thus, there is no requirement of confiscation of raw material in the facts and circumstances - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE LUCKNOW VERSUS M/S. SHUBH METALS AND M/S. SHUBH METALS VERSUS COMMISSIONER OF CENTRAL EXCISE, LUCKNOW [2015 (1) TMI 1039 - CESTAT NEW DELHI]. A bare reading of Rule 25 read with Section 11AC of the Act, the order of confiscation and penalty can be made only in case of fraud, collusion, wilful mis-statement, suppression of facts or any contravention of the provisions of the law with intent to evade duty. There is no such allegation in the facts of the present case save and except non finding or non production of the statutory register RG-I and Form-IV for the reasons that the same were missing and could not be located. Appeal allowed - decided in favor of appellant.
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