2004 (1) TMI 493 - AT - Central Excise

Summary

Issues:
1. Appeal against the order of the Commissioner (Appeals) regarding confiscation of excisable goods.
2. Interpretation of Rule 173Q(1) in relation to goods stored but not manufactured by the assessee.
3. Application of previous case law regarding confiscation of goods.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT, MUMBAI involved a dispute over the confiscation of excisable goods by the adjudicating authority under Section 173Q(1). The Commissioner (Appeals) had set aside the order of the lower authority, prompting the Revenue to file an appeal. The goods in question, 7,118 kgs. of POY, were found in the factory premises without being entered in RG 23A Part-I, although duty had been paid on them. The Commissioner (Appeals) based the decision on the absence of provisions to order confiscation for goods not entered in Modvat registers without taking credit, as per a previous Tribunal ruling.

2. The main contention revolved around the interpretation of Rule 173Q(1) concerning excisable goods stored but not manufactured by the assessee. The Revenue argued that POY, being an excisable good found unaccounted in the factory, was liable for confiscation under this rule. However, the Commissioner (Appeals) disagreed, citing the absence of specific provisions in Central Excise Law requiring an assessee to account for such goods. The Commissioner relied on a previous case involving grey fabrics to support the decision, emphasizing that without taking credit, raw materials cannot be seized and confiscated.

3. The Tribunal deliberated on whether Rule 173Q(1) encompassed goods not manufactured but stored by an assessee. The decision hinged on whether all items brought into the factory, including excisable goods like ceiling fans and fixtures, should be accounted for. The Tribunal upheld the Commissioner (Appeals)'s decision, noting that the assessee's explanation for the non-entry of POY in RG 23A Part-I due to a mistake was a valid reason. Ultimately, the Revenue's appeal was dismissed, and the order of the Commissioner (Appeals) was upheld, emphasizing the importance of following established legal principles and case law in such matters.