2003 (5) TMI 375 - AT - Central Excise

Summary

Issues:
Validity of order-in-appeal modifying original order, confiscation of unaccounted goods, penalty reduction.

Analysis:
1. The appeal raised concerns regarding the modification of the original order by the Commissioner (Appeals) where the confiscation of unaccounted goods was set aside and the penalty reduced based on a previous Tribunal decision.

2. The case involved officers finding unrecorded textile during a stock verification at the respondent's factory, leading to the proposal of confiscation and penalties. The respondents argued their goods were entered in the register after buyer approval due to working in shifts, but the adjudicating authority disagreed, ordering confiscation and imposing a penalty.

3. The Tribunal noted discrepancies in the accountal of goods, emphasizing the requirement to enter all manufactured goods in the RG-1 register regardless of approval status by buyers. The Tribunal upheld the confiscation of goods as the respondents failed to account for them, rejecting the plea based on working shifts and buyer approval.

4. The Tribunal distinguished the present case from the Bhilai Conductors P. Ltd. decision, citing the Bombay High Court's ruling that Rule 173Q can be applied even without mens rea in cases of non-accountal of goods. The Tribunal emphasized the precedence of the High Court's judgment over Tribunal decisions, leading to the reinstatement of the original order for confiscation.

5. The Commissioner (Appeals) was faulted for not considering Rule 226, which also allows for confiscation in cases of non-accountal of goods, indicating an oversight in setting aside the confiscation. The Tribunal highlighted the necessity for maintaining the confiscation based on the rules.

6. The Tribunal criticized the Commissioner (Appeals) for inadequately justifying the penalty reduction despite acknowledging the non-accountal of goods, indicating a lack of sufficient reasoning for the decision.

7. Consequently, the Tribunal set aside the order-in-appeal, restoring the original order for confiscation of goods. However, considering the circumstances, the redemption fine was reduced to Rs. 30,000, and the penalty reduced to Rs. 20,000, ultimately disposing of the Revenue's appeal.