2003 (12) TMI 566 - AT - Central Excise

Summary

Issues:
Challenge to findings in the order-in-appeal regarding confiscation of excess goods, redemption fine, and penalties under Rule 173Q.

Analysis:
The case involved a challenge by the Commissioner of Central Excise against the findings in the order-in-appeal of the Commissioner of Central Excise (Appeals) regarding certain goods found without proper entries in the RG 1 record during a visit to the respondent's factory. The adjudication led to the confiscation of excess goods, imposition of a redemption fine, and penalties under Rule 173Q on the manufacturers and the Chief Accountant. The penalty was reduced on appeal to the maximum amount under Rule 226 for non-entry, and the confiscation and redemption fine were set aside. The Revenue challenged these findings.

The main contention revolved around Rule 173Q(1)(b) of the Excise Rules, 1944, which states that goods not accounted for by the manufacturer are liable to confiscation and penalties. The Tribunal emphasized the clear provisions of the rule, stating that the mere presence of goods in the factory without proper recording constitutes a violation. Non-recording of production in the RG 1 creates a potential for clandestine removal and duty evasion. The Tribunal highlighted the importance of manufacturers promptly recording production in the required register to prevent such violations.

The Tribunal concluded that the findings in the order-in-appeal were not sustainable, ruling in favor of the Revenue and setting aside the impugned order concerning the respondents. The decision was based on the strict application of Rule 173Q and the significance of maintaining accurate records to prevent duty evasion and clandestine removal. The judgment underscored the necessity for manufacturers to adhere to the prescribed rules and promptly record production to avoid penalties and confiscation of goods.