2011 (6) TMI 435 - AT - Central Excise

Penalty under Rule 25 of the Central Excise Rules - excess stock - assessee submits that the weight ascertained by the officers was following the dip reading method and therefore, it is not reliable - Held that - Assailing the weight on the ground that the same was ascertained based on dip reading method is not justified. It is also noticed that authorised signatory has not retracted his statement recorded u/s 14 clearly admitting excess found goods on the date of visit by the officer. Thus, irregular maintenance of stock accounts is clearly established and provisions of Rule 25 (1)(b) of Central Excise Rules are attracted, excess found goods are liable for confiscation and penalties also imposable - Decided in favor of Revenue.

Summary

Issues:
Stock verification discrepancy, Confiscation of excess stock, Penalty under Rule 25 of Central Excise Rules

Analysis:
The case involved a discrepancy in stock verification where officers found excess stock during a visit. The physical stock available was more than the stock as per books of account. The officers allowed a margin for foam formation and concluded that there was an excess of molasses. The authorised signatory accepted the excess stock, leading to confiscation by the original authority. The Commissioner (Appeals) upheld the decision. The appellant argued that the weight ascertained by officers using the dip reading method was unreliable and that there was no excess stock kept for clandestine removal. The appellant sought setting aside the confiscation and penalty. However, the Tribunal noted that the weight recorded by the appellants also followed the dip reading method, making the argument invalid. The authorised signatory admitted the excess goods during the officer's visit, and this statement was not retracted. The irregular maintenance of stock accounts was established, invoking Rule 25 (1)(b) of the Central Excise Rules. The Tribunal found the excess goods liable for confiscation and upheld the penalties imposed, considering the value of the excess goods. The Tribunal concluded that the quantum of redemption fine and penalties was reasonable, leading to the dismissal of the appeal.

In summary, the Tribunal dismissed the appeal, upholding the confiscation of excess stock and the imposition of penalties under Rule 25 of the Central Excise Rules. The decision was based on the admission of excess goods by the authorised signatory and the established irregular maintenance of stock accounts, despite the appellant's argument against the reliability of the weight ascertained by officers. The Tribunal found the penalties imposed to be reasonable given the value of the excess goods.