2006 (2) TMI 467 - AT - Central Excise

Summary

Issues: Confiscation of goods and imposition of penalty due to non-entry in RG-1 register.

The judgment by the Appellate Tribunal CESTAT, NEW DELHI involved the confiscation of 117 MTs. of ferro silicon and the imposition of a penalty on the Director of the manufacturing company due to the non-entry of the material in the RG-1 register during a visit by Central Excise officers. The appellant contended that the material, in powder form, was not marketable, as only ferro silicon in lump form could be sold. They requested for sampling, testing, and expert opinion, which were not conducted. The appellant argued that goods can only be entered in the production register after all manufacturing processes are complete, citing a Tribunal decision in a similar case. The only offense found was the failure to enter the goods in the statutory daily production record, with the appellant explaining that the goods were not ready for sale at the time of seizure. Despite the valid explanation provided by the appellant, no verification was carried out, and the goods were confiscated solely for non-entry in the production record.

The Tribunal found that confiscation and penalty imposition were not justified in the circumstances of the case. The impugned order was set aside, and the appeals were allowed in favor of the appellant. The Tribunal emphasized that goods do not become liable for confiscation merely due to the failure to enter them in the books of account, especially when a valid reason exists, as was the case with the appellant's explanation for non-entry. The decision highlighted the importance of considering all relevant factors and explanations before imposing penalties or confiscating goods based on procedural non-compliances.