2002 (10) TMI 636 - AT - Central Excise

Summary

Issues:
1. Whether the appellants, as an SSI unit, were required to maintain statutory records and file a declaration under Rule 174 of the Central Excise Rules.
2. Whether the Commissioner (Appeals) correctly imposed penalties and ordered confiscation based on the alleged violations by the appellants.
3. Whether the appellants had crossed the prescribed limit for Central Excise registration.

Analysis:
1. The appellants, an SSI unit manufacturing plastic printed laminated flexible sheet/films, were visited by Central Excise officers who found unaccounted stocks of finished goods and raw materials. The appellants argued that, being an SSI unit, they were not required to maintain statutory records or file a declaration under Rule 174. The Commissioner (Appeals) observed that while no statutory records were necessary, simplified records were required to prove they had not crossed the exemption limit. However, the Commissioner's conclusion that the appellants did not cross the limit made the need for maintaining such records unnecessary. The Commissioner's decision was contradictory, leading to the setting aside of the impugned order.

2. The adjudicating authority had ordered confiscation of goods and imposed fines on the appellants. The Commissioner (Appeals) reduced the fines but upheld the rest of the order. However, the Tribunal found that the appellants were maintaining simplified records, including ledgers, stock accounts, and more, which showed no discrepancies. As no evidence of crossing the exemption limit existed, the confiscation of goods and imposition of penalties were deemed unjustified. Therefore, the impugned order was set aside, and the appeal was allowed with consequential relief.

3. The Tribunal noted that the appellants were indeed an SSI unit, and the show cause notice did not allege that they had exceeded the exemption limit. The Commissioner (Appeals) acknowledged this but still required the appellants to maintain simplified records. However, as the appellants were found to have been maintaining such records, and no evidence of crossing the limit was presented, the confiscation of goods and imposition of penalties were deemed unwarranted. Consequently, the impugned order was set aside, and the appeal was allowed with appropriate relief as per the law.