2005 (10) TMI 352 - AT - Central Excise

Summary

Issues: Central Excise duty evasion through unaccounted processed fabrics; Confiscation of goods; Proper maintenance of statutory registers.

Analysis:
1. Central Excise Duty Evasion: The appellant, a processor of man-made fabrics, was accused of not accounting for 1,53,547 L.mtrs. of fabrics seized during a search by Central Excise officers. An employee admitted that the seized fabrics were not recorded in any statutory register, indicating a discrepancy in the accounts.

2. Confiscation of Goods: The Revenue's grievance was that the processed fabrics were not properly accounted for, although their presence in various sections of the mill was acknowledged. The appellant argued that the seizure was due to a minor technical breach rather than a major contravention of the rules. The Tribunal noted that the fabrics would have been recorded in the register if not for the sudden search operation, and the appellant's request to complete the inquiries was denied by the officers. After considering these factors, the Tribunal concluded that there was no significant irregularity warranting the confiscation of goods.

3. Proper Maintenance of Statutory Registers: The appellant contended that they were unsure about the correct stage to enter the processed fabrics in the register, leading to the delay in updating the accounts. The Tribunal acknowledged that the situation seemed to be a case of incomplete accounts rather than deliberate evasion or major violation. Consequently, the Tribunal set aside the order of confiscation and the penalty imposed, ruling in favor of the appellant.

In conclusion, the Tribunal allowed the appeal, finding that the alleged non-accounting of processed fabrics was a minor lapse rather than a serious breach warranting confiscation of goods. The decision highlighted the importance of proper record-keeping and the need for careful consideration before imposing penalties or confiscations in cases of incomplete accounts.