2004 (12) TMI 512 - AT - Central Excise

Summary

Issues: Seizure of goods for non-entry in RG-I, Confiscation under Section 173Q, Imposition of penalty, Failure to account for goods

In this case, the appellant, a manufacturer of automobile parts, had goods seized by Central Excise Officers for not being entered in the RG-I. The officers alleged that the goods, valued at over Rs. 13 lakhs, were finished products not properly accounted for. Subsequently, proceedings were initiated for the confiscation of the seized goods under Section 173Q of the Central Excise Rules, along with the imposition of a penalty of Rs. 50,000. The main contention raised by the appellant was that the goods had not reached the RG-I stage and were still in the inspection area awaiting final inspection. The appellant argued that the non-entry in the RG-I was due to the goods not being ready for disposal or warehousing, as they were yet to undergo the final inspection process. The appellant cited precedents and explained that the failure to enter the goods in the RG-I was not indicative of a failure to account for the goods or clandestine production. The Tribunal, after considering the arguments and evidence, found that the appellant had adequately explained the situation and accounted for the goods. Since the goods were in the inspection room awaiting final inspection, the charge of failure to account for the goods was deemed unsustainable. As a result, the impugned order for confiscation and penalty was set aside, and the appeal was allowed in favor of the appellant, with any consequential relief granted accordingly.