2012 (10) TMI 345 - AT - Central Excise

Confiscation of the excess found material - Held that - As regards the excesses, there is no evidence showing that the appellant was in the process of removing the goods without entering the same in the records. The appellant at the time of seizure itself had taken a categorical stand that the said excess found wire was received by them from their job worker on the date of visit of the officers and the entries in respect of the same was to be made within a period of 24 hours. As such extending the benefit to the appellant, the confiscation of excess found scrap and wire is aside - in favour of assessee. Demand on the shortages of inputs - Held that - Admittedly quantity of 5511 kg. of semi-finished goods was found by the officers at the time of physical verification of the goods. The said quantity was manufactured out of the said raw material alleged to be found short. As such this is not a case of removal of the inputs from the factory but as a mere case of technical error of not making entry for issuance of inputs in the statutory records. As such there in no justification for confirmation of demand of duty - in favour of assessee..

Summary

Issues:
1. Confiscation of excess found material
2. Confirmation of demand on the short found inputs
3. Imposition of penalties

Confiscation of Excess Found Material:
The appellant, engaged in manufacturing copper wire, had excess scrap and wire found during a visit by officers. The officers suspected clandestine removal and seized the material. The appellant claimed the excess scrap was for captive consumption and the wire was received from a job worker. The tribunal found no evidence of intent to remove goods without record entry. The confiscation of excess scrap and wire was set aside.

Confirmation of Demand on Short Found Inputs:
A Show Cause Notice proposed confiscation of excess material, demand of duty for shortages, and penalties. The tribunal noted that the quantity of semi-finished goods found matched the alleged shortage, indicating a clerical error in record-keeping rather than actual removal of inputs. Therefore, the demand for duty was unjustified.

Imposition of Penalties:
With the confiscation and demand set aside, the penalties imposed on the manufacturing unit and its director were also overturned. The tribunal allowed both appeals, providing consequential relief to the appellant. The judgment emphasized the importance of accurate record-keeping and distinguished between technical errors and deliberate misconduct in excise matters.