2006 (11) TMI 409 - AT - Central Excise

Summary

Issues:
1. Confiscation of unaccounted goods.
2. Requirement of maintaining RG-I register for 100% EOU.
3. Compliance with Central Excise Rule No. (2) 2001.
4. Applicability of Board-prescribed form for record maintenance.

Confiscation of Unaccounted Goods:
The appellant appealed against an order confiscating unaccounted goods, allowing release upon payment of fines. The appellant, a 100% EOU, argued they were not obligated to maintain an RG-I register. They cited Tribunal judgments supporting their stance. The Revenue contended that the old rules requiring RG-I maintenance were no longer applicable under the new Central Excise Rules (2) 2001. The appellant argued that Rule 17 mandated maintaining goods accounts in a specified form by a Board notification, yet no such form was provided. The appellant claimed excess cotton yard stock was due to record timing discrepancies, not non-maintenance. The Tribunal found the appellant maintained records until 7AM, with the excess stock discovered later. As no prescribed form existed for production record-keeping, the goods were not liable for confiscation.

Requirement of Maintaining RG-I Register for 100% EOU:
The case involved whether a 100% EOU was required to maintain an RG-I register under the new Central Excise Rule No. (2) 2001. The Tribunal noted that Rule 17 mandated a form for production record-keeping, but the Board had not specified any form. The appellant's argument that excess stock was due to timing discrepancies, not non-maintenance, was accepted. As the Tribunal found no prescribed form for EOU record-keeping, the confiscation of goods was deemed unsustainable, leading to the appeal's allowance.

Compliance with Central Excise Rule No. (2) 2001:
The judgment analyzed the applicability of Central Excise Rule No. (2) 2001 regarding the maintenance of records by a 100% EOU. It was established that Rule 17 required a specified form for production record-keeping, which had not been provided by the Board. The Tribunal found that the appellant maintained records until 7AM, with discrepancies discovered later due to timing issues. As no statutory form existed for production record-keeping, the confiscation of goods was set aside, along with the redemption fine.

Applicability of Board-Prescribed Form for Record Maintenance:
The issue revolved around the absence of a Board-prescribed form for maintaining production records by a 100% EOU as mandated by Rule 17 of the Central Excise Rules. The appellant argued that the lack of a specified form rendered the goods non-liable for confiscation, attributing excess stock to timing discrepancies. The Tribunal concurred, setting aside the confiscation and redemption fine, ultimately allowing the appeal in favor of the appellant.