2005 (4) TMI 397 - AT - Central Excise

Summary

Issues:
- Verification of stock in store room
- Goods not entered in RG-1 Register
- Allegation of contravention of Rules 100B and 226 of Central Excise Rules
- Confiscation of goods
- Appeal by Revenue

Analysis:
The appeal before the Appellate Tribunal CESTAT, NEW DELHI, centered around the verification of stock in the store room of the respondent's unit on a specific date. The Revenue contended that while the packed goods were duly entered in the RG-1 Register, a small quantity of yarn in various lots found in the packing room was only recorded in the private register of the respondents. The Revenue argued that this discrepancy, coupled with the failure to declare the private register to the department, rendered the goods liable for confiscation under Rules 100B and 226 of the Central Excise Rules.

During the proceedings, Shri P.M. Rao, representing the Revenue, emphasized that the goods not being recorded in the RG-1 Register warranted their confiscation. However, the Tribunal examined the circumstances and noted that the respondents operated as a 100% Export Oriented Unit (EOU). The Commissioner (Appeals) had already determined that the goods were under physical control, with an Inspector stationed at the unit. Importantly, there was no evidence of an attempt by the respondents to clear these goods without duty payment in the domestic market. Furthermore, the goods were not in a fully finished state to be entered in the RG-1 Register at the time of inspection.

Upon careful consideration, the Tribunal concluded that the goods in question, being in small lots and requiring further packing before entry into the RG-1 Register, did not warrant confiscation. The Tribunal found no merit in the Revenue's appeal, highlighting that the goods were still in the process of being readied for proper documentation. Consequently, the appeal filed by the Revenue was dismissed, and the decision was pronounced in open court on 1-4-2005.