2009 (4) TMI 609 - AT - Central Excise

Summary

Issues involved: Surprise visit leading to discovery of unaccounted stock, confiscation of goods, imposition of penalties on company officials.

Confiscation of raw materials and semi-finished goods: The Tribunal held that confiscation under Rule 25 of Central Excise Rules was not justified as there was no evidence of clandestine removal. Previous decisions were cited to support this argument.

Confiscation of finished goods: Despite lack of evidence of clandestine removal, the admission by the Managing Director that goods were not accounted for led to upholding of confiscation. The Tribunal found the Director's explanation unsatisfactory and reduced penalties.

Penalties on officials: The Managing Director's awareness of the situation warranted a penalty, while the authorized signatory, being an employee, was not held liable. Penalties were reduced for the Company and the Managing Director.

Conclusion: Confiscation of finished goods was upheld, with reduced redemption fine and penalties. Confiscation of raw materials and semi-finished goods was set aside. Penalties were reduced for the Company and officials, except for the Managing Director.