2016 (2) TMI 953 - AT - Central Excise

Confiscation of the finished goods found excess at the time of investigation - the quantity of 21.99 MT of MS Ingots were in excess - Held that - the ground of challenging the impugned order is that the stock taking of 2372 pieces of ingot could not have been done within the period of 5 hours which is not practically possible. Therefore the excess of stock found was merely eye estimation and stock taking was done on average basis. As no physically stock taking was done therefore the allegation of excess stock found and the same has not been recorded in the statutory record is not sustainable. In that circumstance I hold that the duty cannot be demanded from the appellant on the ground of stock goods found in excess. In these circumstances the goods are not liable for confiscation consequently the redemption fine and penalty imposed on the appellant is set aside and the appeal is allowed with consequential relief if any.

Summary

Issues:
Challenge against confiscation of finished goods found in excess at the time of investigation.

Analysis:
The appellant appealed against the confirmation of confiscation of finished goods found in excess during an investigation. The facts revealed that the appellant's factory premises were visited by officials who discovered an excess quantity of MS Ingots. It was alleged that the goods were manufactured from unaccounted raw material to evade excise duty. Subsequently, a show cause notice was issued for confiscation of the goods, along with the imposition of fines and penalties. Both lower authorities upheld the confiscation and imposed fines on the appellant. The appellant challenged this decision.

The appellant failed to appear during the hearing, despite multiple adjournments in the past. The tribunal proceeded with the case considering the history of the matter. Upon reviewing the records, it was argued that the stock taking of the ingots within a short period was not feasible, suggesting that the excess stock was estimated visually and not through physical counting. As no physical stock taking was conducted, the tribunal deemed the allegation of excess stock unsustainable. Consequently, the duty demand on the appellant for the excess stock was dismissed. The tribunal ruled in favor of the appellant, setting aside the redemption fine and penalty, and allowed the appeal with any consequential relief.

In conclusion, the tribunal found that the excess stock allegation was not substantiated due to the lack of physical stock taking, leading to the dismissal of duty demand and overturning of the penalties imposed on the appellant.