1999 (2) TMI 617 - AT - Central Excise

Summary

Issues:
- Non-entry of manufactured goods in RG 1 register
- Confiscation of goods and imposition of penalty
- Interpretation of self-removal procedure under Central Excise rules
- Application of mens rea in cases of non-accounting
- Reference to previous judgments on non-entry of goods in RG 1

Analysis:

1. Non-entry of manufactured goods in RG 1 register: The appellant, engaged in manufacturing forgings, pipe fittings, and machined articles, supplied products to Government buyers based on customer designs. The goods were inspected by customers before delivery, and historically, entry in the RG 1 register was done only at the time of dispatch, not immediately after manufacture. Central Excise officers found some goods not entered in RG 1 during a visit, leading to a show cause notice for confiscation and penalty.

2. Confiscation of goods and imposition of penalty: The adjudicating authority and Commissioner (Appeals) upheld the confiscation and penalty due to non-entry in RG 1, citing the necessity to follow procedures under the self-removal scheme. The department argued that failure to account for goods as per prescribed procedures warranted confiscation and penalty, supported by previous tribunal judgments emphasizing the importance of correct accounting.

3. Interpretation of self-removal procedure under Central Excise rules: The Commissioner (Appeals) referred to CEGAT decisions highlighting the significance of proper accounting under the self-removal procedure. The department stressed the obligation on assesses to maintain accurate records, indicating that any non-entry could lead to confiscation and penalty as per established rules.

4. Application of mens rea in cases of non-accounting: The department contended that mens rea was not essential for imposing penalties in cases of non-accounting, emphasizing the obligation to maintain accurate records irrespective of intent. The appellant argued against clandestine removal allegations, citing entries in other registers as evidence of non-malicious intent.

5. Reference to previous judgments on non-entry of goods in RG 1: Both sides referenced various tribunal judgments to support their arguments regarding the non-entry of goods in the RG 1 register. The appellant relied on specific cases to refute allegations of clandestine removal, while the department highlighted previous decisions to justify the imposition of penalties for non-accounting practices.

In conclusion, the appellate tribunal considered the totality of facts and circumstances, finding the matter not severe enough to warrant confiscation and redemption fine. While acknowledging the importance of immediate entry in the RG 1 register, the tribunal modified the order to retain a small penalty, emphasizing that each case must be evaluated on its merits. The appeal was disposed of with the modified order, balancing the need for accurate accounting with the appropriate level of penalty in the given situation.