TMI Blog2013 (9) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the present case – Appeal rejected – Decided against the Assessee. Meaning of excisable goods used in the Rule 25 of the Central Excise Rules, 2002 – Submitted by appellant that expression ‘excisable goods’ mentioned in clause (b) of the said sub-rule, refers only to the goods manufactured by the manufacturer – Held that:- The said Rule 25 is a penal provision and enumerates various situations and clause (b) of the sub-rule (1) is directed against non-accountal of excisable goods produced or manufactured or stored refers, inter alia, also to a manufacturer, who does not account for any excisable goods produced or manufactured or stored by him. The word ‘or’ in the said clause should be read disjunctively - Excisable goods defined at Sec. 2(d) of Central Excise Act, 1944 as goods specified in [[the First Schedule and the Second Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986)] as being subject to a duty of excise and includes salt - Besides, the use of the word ‘any’ before the word excisable goods, in the said clause, makes it more clear and points out to a plausible interpretation that the said Rule is not only refers to the excisable goods manufactured a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises of the Appellant No. 1 are not liable for confiscation under Rule 25 of the Central Excise Rules, 2002. He has submitted that confiscation of unaccounted raw materials in the factory premises cannot be ordered even if it is admitted to have been stored with an intention to use the same in the manufacture of excisable goods meant for clandestine removal; such an action is not punishable under Central Excise Act, 1944 or various Rules made thereunder. He has submitted that Rule 25 of Central Excise Rules, 2002, is applicable only to cases of non-accountal of excisable goods manufactured or produced by a manufacturer and the said Rule is not directed against storage of unaccounted raw materials for any purpose nor it includes any intention or preparation in keeping such unaccounted raw materials for its use in the manufacture of excisable goods meant for clandestine removal. The contention is that on the basis of assumption, presumption and suspicion, the order of confiscation and imposition of penalty cannot be sustained. In support of his contention that raw materials are not liable for confiscation, he has placed reliance on the following decisions : Paramount Rolling Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Hon ble Supreme Court in the case of Punjab Tractors Ltd. v. Commissioner of Central Excise, Chandigarh - 2005 (181) E.L.T. 380 (S.C.). He has further submitted that a separate show-cause notice was issued to the appellant for shortage of goods for which the appellants had approached the Settlement Commission. He has submitted that the confiscation of excess raw materials and penalty on Appellant No. 1 and personal penalty imposed on the Director of the Appellant Company, Mr. Kamalesh Ladha by the adjudicating authority and upheld by the ld. Commissioner (Appeals), are in accordance with law. In support of his contention, he referred to the following decisions : (i) Anti-friction Bearing Corpn. Ltd. - 1995 (75) E.L.T. 708 (CEGAT); (ii) Majestic Auto Ltd. - 2004 (172) E.L.T. 391 (CESTAT); (iii) Uptron India Ltd. - 1994 (70) E.L.T. 155 (CESTAT); (iv) Goodyear India Ltd. - 1990 (48) E.L.T. 394 (CEGAT); (v) Machino Montell (I) Ltd. - 2006 (202) E.L.T. 398 (P H-DB) = 2006 (4) S.T.R. 177 (P H); (vi) Parmarth Steel Alloys (P) Ltd. - 2007 (209) E.L.T. 200 (Tri.- Del.); (vii) Ilpea Paramount Pvt. Ltd. - 2007 (213) E.L.T. 500 (Tri.-LB.); (viii) Sai Machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be cleared clandestinely without payment of duty, such unaccounted raw materials cannot be liable for seizure and confiscation under Rule 25 of the Central Excise Rules, 2002 as the said Rule is applicable only to the excisable goods manufactured and stored in the factory premises and not to raw materials. Before assessing the said argument, it is necessary to delve into the provisions of Rule 25 of the Central Excise Rules, 2002 which reads as : RULE 25. Confiscation and penalty. - (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer, - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under Section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lsewhere and stored in the factory. Thus, the said Rule 25 of the Central Excise Rules, 2002 covers both the situations, that is, where excisable goods are manufactured and stored in the factory and also those excisable goods that are procured and stored in the factory premises. Needless to emphasize, mere keeping or storage of excisable goods in the factory premises by a manufacturer per se shall not invite the rigour of the said provision, but something more is required, to come within its fold. 8. In the present case, the excisable goods procured as raw materials found in the factory premises were not stored in a routine manner, but were purposely kept unaccounted. As per the categorical statement of the Director, Mr. Kamalesh Ladha, it is evident that the said excisable goods were procured with a specific intention to use it as raw material in the manufacture of finished excisable goods intended to be removed clandestinely without payment of duty. In such circumstances, in my opinion, clause (b) of Rule 25(1) of Central Excise Rules, 2002 could be invoked for confiscation of the said non-accounted excisable goods stored in the factory premises for its use as raw materials b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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