2005 (2) TMI 225 - AT - Central Excise

Summary

Issues: Confiscation of auto parts, redemption fine, imposition of penalty.

Confiscation of Auto Parts:
The appellant's appeal was against the confiscation of 45,400 pieces of auto parts valued at approximately Rs. 10 lakhs, with a redemption fine of Rs. 1,00,000 and a penalty of Rs. 10,000. The appellant had informed the Central Excise Superintendent about the accumulation of stock due to market conditions and that the goods were stored outside the Bonded Store Room within the factory premises. The officers alleged that finished goods were kept without proper accountal for clandestine removal. The appellant argued that the storage outside the Bonded Store Room was due to stock accumulation, and the non-entry of stock in the statutory record was based on the misunderstanding that goods needed to be placed in the bonded store room for entry in the statutory books of account. The Tribunal found that there was no failure to account for the produce as the entire stock was physically available in the factory, and the appellant had provided reasons for storing goods outside the bonded store room. The punishment, if any, would be for the violation of rules related to daily accounting, and in this case, the confiscation and penalty were not justified. The impugned order was set aside, and the appeal was allowed.

Redemption Fine and Imposition of Penalty:
The appellant contended that there was no evidence to suggest any clandestine removal of goods, and therefore, confiscation and penalty were unjustified. The appellant's explanation for not entering daily production in the RG-1 register was considered, even if not strictly legal. The learned SDR argued that failure to enter finished goods in the RG-1 register would attract provisions of Rule 173Q of the Central Excise Rules. However, the Tribunal held that the charge of not accounting for goods could not arise solely from the failure to enter daily production in the RG-1 register. The Tribunal concluded that in the circumstances of the case, the confiscation and penalty were not justified. The appeal was allowed, and the impugned order was set aside.