2009 (1) TMI 574 - AT - Central Excise

Summary

Issues:
Confiscation of excess found goods, imposition of penalties, non-entry in RG-1 register, seized goods not finished goods, quality control process, goods meant for clandestine removal, duty liability for goods in unregistered premises.

Confiscation of Excess Found Goods and Imposition of Penalties:
The appeals were filed against an order confiscating excess goods and imposing penalties on the manufacturing unit and its authorized signatory. Central Excise officers found 161 drums of industrial perfumes not entered in the RG-1 register during a visit to the factory. Further investigations revealed two drums in unregistered premises, leading to their seizure. The original adjudicating authority confirmed the confiscation and penalties, which were appealed. The Tribunal found that the seized goods were not finished products as they required further processing and labeling. The goods were part of work-in-progress registers and not intended for clandestine removal. As a result, the confiscation of the 161 drums was set aside, and penalties were revoked.

Quality Control Process and Clandestine Removal Allegations:
The Tribunal considered the submissions regarding the quality control process and the lack of evidence indicating the goods were meant for clandestine removal. The goods were in the final product stage, awaiting quality control approval and labeling. The absence of sales-ready condition and the presence of records like issue slips and raw material registers supported the argument that the goods were not intended for clandestine activities. The Tribunal agreed that the goods were not fully finished without quality control tests and labeling, leading to the decision to overturn the confiscation and penalties based on non-entry in the RG-1 register.

Duty Liability for Goods in Unregistered Premises:
While the confiscation and penalties related to the 161 drums were set aside, the Tribunal noted two drums containing industrial perfume in unregistered premises without excise documents. The appellant admitted duty liability for these goods, which were cleared without duty payment. The Tribunal remanded the matter to the original adjudicating authority to determine the duty liability for the two drums and the consequent penal action. The appeals were allowed, setting aside the confiscation and penalties for the 161 drums, except for the issue of duty liability for the goods in unregistered premises, which required further assessment.

This judgment by the Appellate Tribunal CESTAT, WEAHMEDABAD addressed the confiscation of goods, penalties imposed, the quality control process, allegations of clandestine removal, and duty liability for goods in unregistered premises. The decision focused on the distinction between finished and unfinished goods, the necessity of quality control procedures, and the lack of evidence supporting clandestine activities. The Tribunal set aside the confiscation and penalties for the 161 drums but remanded the matter concerning duty liability for goods in unregistered premises for further assessment.