2003 (11) TMI 382 - AT - Central Excise

Summary

Issues:
1. Violation of Central Excise Rules regarding entry of production in statutory Book, RG-I.
2. Confiscation of goods and imposition of penalty under Rule 173Q(1)(b) of Central Excise Rules.
3. Appeal against the adjudication order by the Commissioner (Appeals) based on incomplete manufacturing of goods.
4. Dispute over whether machinery parts were fully manufactured and rightly confiscated.

Analysis:
1. The case involved allegations of the respondent violating Central Excise Rules by not entering their production in the statutory Book, RG-I. Central Excise officers claimed that the respondent had failed to record production from a specific period, resulting in a value of approximately Rs. 41.6 lakhs. The Deputy Commissioner of Central Excise and Customs confiscated the goods and imposed a penalty under Rule 173Q(1)(b) of Central Excise Rules.

2. The respondent appealed the adjudication order, arguing that the goods were not fully manufactured as certain components required replacement and testing, while others were unfinished. The Commissioner (Appeals) accepted the appeal, citing expert opinion supporting the claim that the goods were incomplete. The Commissioner relied on a previous Tribunal decision that non-accountal was a technical breach and did not warrant confiscation.

3. The Revenue persisted with the argument that the machinery parts were fully manufactured and justified in being confiscated. However, upon review of the records and hearing the learned SDR, the Tribunal found no illegality in the Commissioner (Appeals)'s decision. The Tribunal noted that there was no evidence of clandestine production or attempts to evade duty. The dispute over the accounting stage of manufactured goods was deemed insufficient grounds for confiscation.

4. Ultimately, the Tribunal rejected the Revenue's appeal, stating that the Commissioner (Appeals)'s decision was based on factual evidence presented by the assessee and supported by expert opinion. The Tribunal emphasized that the mere disagreement over the accounting stage of goods did not justify confiscation, as there was no indication of fraudulent intent on the part of the manufacturer. The appeal was deemed to lack merit and was consequently rejected.