2016 (11) TMI 1491 - AT - Central Excise

Unaccounted goods - the appellant has not incorporated the up-to-date production particulars in the daily stock register - Held that - It is an admitted fact on record that the appellant had not maintained the daily stock account, incorporating the particulars of goods manufactured in the factory on the date of visit of the Central Excise Officers. Thus, there is violation of Rule 10 of the Central Excise Rules, 2002, for which goods can be confiscated and penalty can be imposed under Rule 25 ibid - considering the fact that the seized goods were lying in the factory and were not removed clandestinely by the appellant, the quantum of redemption fine and penalty imposed by the authorities below are in the higher side, and is therefore reduced - appeal allowed in part.

Summary

Issues: Violation of Rule 10 of the Central Excise Rules, 2002 regarding maintenance of daily stock account, adjudication of unaccounted goods, imposition of redemption fine and penalty, appeal against impugned order.

Analysis:
1. Violation of Rule 10 of the Central Excise Rules, 2002:
The appellant, engaged in the manufacture of copper ingots, failed to maintain the daily stock account as required by Rule 10 of the Central Excise Rules, 2002. This violation was detected during a visit by Central Excise Officers, leading to the confiscation of unaccounted goods valued at ?39,61,800 and imposition of penalties.

2. Adjudication of Unaccounted Goods and Imposition of Redemption Fine and Penalty:
The Department, based on the non-maintenance of records, adjudicated the matter by confiscating the unaccounted goods and offering the appellant the option to redeem them on payment of a redemption fine of ?15,00,000. Additionally, a penalty was imposed on the appellant under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944.

3. Appeal Against Impugned Order:
The appeal was directed against the order passed by the Commissioner (Appeals), Central Excise, New Delhi, upholding the adjudged demand. The appellant argued that the production register was not maintained on the day of the visit due to the illness of the Accountant's son, and the unaccounted goods were not removed clandestinely from the factory.

4. Judgment and Modification of Impugned Order:
After hearing both sides and reviewing the records, the Tribunal acknowledged the violation of Rule 10 but considered that the quantum of redemption fine and penalty imposed was excessive. In the interest of substantial justice, the Tribunal modified the impugned order, reducing the redemption fine to ?50,000 and the penalty amount to ?10,000. The appeal was disposed of accordingly.

This comprehensive analysis highlights the key legal issues, arguments presented, and the Tribunal's decision to modify the impugned order based on the facts and circumstances of the case.