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TMI Blog2014 (7) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... intained by the appellant, found that the maintenance of the production format was not disclosed by the appellant as required under Rule 173-G(5) of the Central Excise Rules, 1944 (hereinafter referred to as the "Rules) and that the appellant was draining out the aerated water without entering it first in the R.G.-1 register and were not maintaining any record relating to draining out of the aerated water. The officers also found that the aerated water so drained out was not on account of being unfit for human consumption, but on account of the fact that it was not in conformity with the specifications provided under the Prevention of Food Adulteration Act and Weights and Measures Act, 1976. Accordingly, a demand-cum-show cause notice for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able can only be subjected to excise duty and since the bottles, which were under filled or over filled or the bottles had badly crowned caps were not marketable, consequently, no excise duty was payable far less any penalty. The Additional Commissioner, Central Excise by his order dated 12.4.2002 confirmed the demand of duty amounting to Rs. 6,59,137/- under the proviso to Section 11-A(1) of the Central Excise Act, 1944 read with Rule 49(1) of the Rules along with interest under Section 11-AB of the Act. The authority further imposed a penalty of the same amount under Section 11-AC of the Act read with Rule 173-Q of the Rules. The Additional Commissioner in its order held that the production format maintained by the appellant was not dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere shown in the production format against the columns of under filled, over filled, contaminated or badly crowned caps. The Tribunal was of the opinion that these bottles which were under filled or over filled etc. were excisable goods and before destroying the same, the appellant were required to take permission from the authority. The Tribunal was further of the opinion, that if the goods were defective or were non-marketable, the appellant was required to seek remission under Rule 49 of the Rules, which in the instant case was not done. The Tribunal was further of the opinion that an entry was required to be made in R.G.-1 immediately the screening test was completed, which in the instant case was not done in the register. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellant indicating the production of the aerated water in their production line. We further find that the show cause notice and the presumption drawn that there has been an evasion of payment of duty on the aerated water which has been drained out is based on the information derived from the production register. Consequently, we are of the opinion, that all the authorities including the Tribunal were not justified in holding that the appellant had not disclosed its production register under Section 173-G(5) of the Rules to the Department. This finding is perverse and is against the material evidence on record. Further, we find that the Additional Commissioner was not justified in holding that the production register is not an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rate of duty is required to be indicated. In column No.14, the amount of duty, that is payable, is required to be indicated. We also find that the product manufactured by the assessee undergoes a screening test and only thereafter finished goods which are not contaminated, under filled, over filled or badly crowned bottles are entered in R.G.-1 register. In the light of Rule 53 of the Rules, read with the columns indicated in R.G.1 register, we are of the opinion, that only "finished goods" are required to be entered in R.G.1 register. The question which arises for consideration is, whether the contaminated bottles or the over filled or under filled bottles or badly crowned capped bottles are "finished goods" or not ? In FGP Ltd. Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Weights and Measures Act they were required to fill the bottles with aerated water containing the declared quantity of goods, failing which, they would be liable to penal action in terms of the said Act. Consequently, filling less or more aerated water in the bottles is not marketable under the Weights and Measures Act. We are of the opinion that such over filled or under filled or badly crowned bottles were not completely manufactured finished goods and, therefore, would not be exigible to excise duty. As such, under filled or over filled or badly crowned caps bottles cannot be treated as being fully manufactured nor could it be treated as finished goods and, consequently, there was no occasion for such goods to be entered in R.G.1 regis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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