2013 (8) TMI 94 - AT - Central Excise

Excess amount of stock of finished goods found than the recording in RG-1 register In respect of excess of 17.822 M.T. of laminated fabrics and 2350 woven sacks - Production of the woven sacks is 3,00,000 and during one 8 hours shift they would have produced 1,00,000 bags. Since production of the previous day has been entered in the RG-1 register at 8 a.m. on 30th January 2010, the production recorded at 5 p.m. on the day of visit would represent the production of about two shifts which would be about 2,00,000 bags, as against this the stock found was 1,71,000 which is well within the quantity of the bags which would have been produced during that day and which would have been entered in the RG-1 register next day - Respondent were producing on an average 15.6 M.T. of laminated fabrics in a day. The Panchnama does not show as to whether for determining the excess unaccounted production of laminated fabrics, the fabrics in unpacked condition has also been included. Looking to the fact that every day, the factory manufacturers 15.6 M.T. of laminated fabrics and on any day in addition to this, there was some quantity of laminated fabricated in unpacked condition - There was no excess stock and that the stock which is alleged to be unaccounted excess stock would have been entered in the RG-1 register on the next day Decided against the Revenue.

Summary

Issues:
Confiscation of alleged excess stock of laminated fabrics and woven sacks under Rule 25 of the Central Excise Rules, 2002.

Analysis:
The case involved the confiscation of alleged excess stock of laminated fabrics and woven sacks by the Jurisdictional Assistant Commissioner under Rule 25 of the Central Excise Rules, 2002. The respondent, a manufacturer of poly propylene woven sacks and fabrics, faced allegations of unaccounted excess stock during a stock taking on January 30, 2010. The Assistant Commissioner ordered confiscation of the excess stock, imposing a redemption fine and penalty. However, the Commissioner (Appeals) later set aside this order, stating that the alleged excess production was of the same day and would have been accounted for in the RG-1 register the next day at 8 a.m. The Revenue appealed this decision.

The Departmental Representative argued that the excess production of laminated fabrics and woven sacks was not recorded in the RG-1 register, indicating unaccounted production from the previous day. The Counsel for the appellant, on the other hand, defended the Commissioner (Appeals) findings, stating that the alleged excess production was within the normal production range for the day and would have been entered in the register the next day. After considering both sides' submissions, the judge analyzed the situation.

Regarding the woven sacks, the judge agreed with the Commissioner (Appeals) that the stock found was within the expected quantity for the day, as it represented the production of about two shifts. Therefore, there was no unaccounted excess stock of woven sacks. As for the laminated fabrics, the judge noted that the alleged excess production was consistent with the average daily production of the respondent. The judge found no evidence of unaccounted excess stock, concluding that the stock in question would have been entered in the RG-1 register the next day. Consequently, the judge dismissed the Revenue's appeal, upholding the Commissioner (Appeals) decision.

In summary, the judgment revolved around the confiscation of alleged excess stock of laminated fabrics and woven sacks under Rule 25 of the Central Excise Rules, 2002. The Commissioner (Appeals) decision was upheld, as the judge found no evidence of unaccounted excess stock based on the normal production patterns of the respondent and the timing of stock entries in the RG-1 register.