2006 (4) TMI 273 - AT - Central Excise

Summary

Issues involved: Imposition of penalty under Rule 25 of Central Excise Rules, 2001 and confiscation of goods due to unaccounted stock.

Imposition of Penalty under Rule 25:
The case involved the imposition of a penalty of Rs. 10,000 on the appellant under Rule 25 of Central Excise Rules, 2001, along with a redemption fine of Rs. 30,000. The appellant, a manufacturer of HDPE/PP woven bags/sacks, faced penalties after Central Excise Officers discovered unaccounted goods during a surprise visit to the factory. The officers found 1201 kg of goods not entered in the books of accounts, which led to the penalty imposition.

Confiscation of Goods due to Unaccounted Stock:
The appellant explained that the unaccounted goods were returned from specific entities, M/s. K.S. Oil Mills and M/s. Nandeshwari Packaging, without accompanying documents, resulting in the omission from the factory's accounts. However, the appellant later produced documents covering the goods. The issue revolved around Rule 25, which requires accounting for excisable goods produced, manufactured, or stored. The appellant had accounted for the goods in their possession, and the order did not find any discrepancies in the explanation provided.

Judgment:
The Tribunal noted that the appellants had given a full account of the goods stored by them, meeting the requirement of Rule 25. As the order did not identify any false information in the explanation provided, the confiscation and penalty were deemed unsustainable. Consequently, the Tribunal set aside the confiscation and penalty, allowing the appeals in favor of the appellants.