2009 (2) TMI 618 - AT - Central Excise

Summary

Issues:
Departmental appeal against dropping of proceedings on show cause notice for excess raw materials found in multiple premises.

Analysis:
The judgment pertains to a Departmental appeal against the dropping of proceedings on a show cause notice issued for excess raw materials found in multiple premises of the respondent, who was engaged in dyeing of acrylic yarn and trading of raw materials. The Central Excise officers conducted a verification of stock in three premises and found discrepancies in the raw material stock compared to the register. The original authority dropped the proceedings considering the different locations of the godowns, absence of credit taken for excess raw materials, and no discrepancies in finished goods. The Commissioner (Appeals) upheld this decision, emphasizing that Rule 25 was not applicable in this case. Both authorities found that the charges in the show cause notice were not proven.

The key contention was whether the raw materials found in premises other than the factory needed to be reflected in the register. The respondent argued that they were involved in trading raw materials in addition to dyeing acrylic yarn. The judgment highlighted that there was no requirement for raw materials in other premises to be entered in the manufacturing unit's register. The appeal was filed against the concurrent findings of the original authority and the Commissioner (Appeals), which favored the respondent. The appellate tribunal found no valid grounds to interfere with the Commissioner's findings and rejected the Department's appeal.

In conclusion, the appellate tribunal upheld the decision of the Commissioner (Appeals) and rejected the Department's appeal, emphasizing that the charges in the show cause notice were not substantiated, and there was no obligation to include raw materials from trading activities in the manufacturing unit's register. The judgment provides clarity on the treatment of raw materials in multiple premises and the application of rules in cases involving discrepancies in stock verification.