2005 (10) TMI 345 - AT - Central Excise

Summary

Issues:
1. Confiscation of motor vehicle parts and imposition of penalty due to mismatch of goods.
2. Allegation of intention to remove goods clandestinely.
3. Compliance with provisions of the law regarding maintaining records.
4. Application of Rule 173Q of the Central Excise Rules.
5. Violation of Rule 226 and imposition of penalty.

Analysis:
1. The appeal was filed against the Order-in-Appeal confirming the confiscation of motor vehicle parts and imposition of penalty due to a mismatch of goods found during a search at the factory premises. The Director admitted the discrepancy but explained that the goods were not entered in the RG-1 register due to quality control issues. The Tribunal considered the nature of the goods found and the circumstances of the case to determine the intention behind the discrepancy.

2. The appellant argued that there was no evidence to substantiate the allegation of intending to remove goods clandestinely. The Tribunal noted the lack of evidence supporting this claim and referred to previous decisions to support the appellant's position. The Tribunal distinguished the facts of the case from previous judgments cited by the Department's Representative (D.R.) to justify setting aside the confiscation and penalty under Rule 173Q.

3. The D.R. emphasized the appellant's duty to comply with the law, including maintaining records as required. The Tribunal acknowledged the violation of Rule 226 for not maintaining a private record of goods in the store room, imposing a penalty of Rs. 2000 under the rule. However, the Tribunal found that the provisions of Rule 173Q were not applicable in this case due to the specific circumstances and the appellant being an SSI unit.

4. Considering the submissions from both sides and examining the record, the Tribunal concluded that the goods found unaccounted for in the statutory records were actually present in the factory premises. The Tribunal applied the decision in the case of Bhilai Conductors to support its findings, highlighting the absence of evidence indicating an intent to evade payment of duty. The Tribunal ruled that the provisions of Rule 173Q did not apply in this situation.

5. In the final judgment, the Tribunal modified the impugned Order passed by the Commissioner (Appeals) to set aside the confiscation and penalty under Rule 173Q while upholding the penalty of Rs. 2000 for the violation of Rule 226. The Tribunal's decision was based on a thorough analysis of the facts, legal provisions, and precedents cited by both parties, ensuring a fair and reasoned outcome.