2014 (3) TMI 199 - AT - Central Excise

Waiver of pre deposit - Confiscation of the excess stock of finished goods as well as raw-material - Discrepancy in RG-1 Register - Held that - The existence of excess un-accounted stock of finished goods valued at 11,45,000/- is not denied. Though the appellant s plea is that the goods were not fully finished condition, this fact was not mentioned at the time of stock taking and this plea has taken for the first time at this stage. Therefore, prima facie this plea cannot be accepted. Moreover recovery of kachha slips showing clearances of the goods is also an indication that non-accountal may be with intention to clear the goods without payment of duty - In view of this, this is not the case of total waiver - Conditional stay granted.

Summary

Issues:
1. Confiscation of excess stock of finished goods and raw materials.
2. Imposition of penalties on the appellant and the partner.
3. Stay application for waiver of pre-deposit of penalties.

Confiscation of Excess Stock:
The case involved the appellant, a manufacturer of Plastic Moulded Components, found with excess stock of finished goods and unaccounted raw materials during a visit by DGCEI officers. The Jurisdictional Additional Commissioner ordered confiscation of the excess stock of finished goods and raw materials, with penalties imposed on the appellant and a partner. The Commissioner (Appeals) upheld the confiscation of finished goods but set aside the confiscation of raw materials. The appellant argued that the finished goods were fully finished and their confiscation was unjustified. However, the Tribunal found the excess unaccounted stock of finished goods and the recovery of kachha slips indicating clearances without invoices as evidence of deliberate non-accounting, leading to the decision to partially waive the penalties upon deposit of specified amounts by the appellant and the partner.

Imposition of Penalties:
The penalties imposed on the appellant and the partner were challenged on the grounds that the penalty amount exceeded the duty involved on the goods, and the partner was not directly involved in record maintenance. The Tribunal considered the arguments but noted that the partner had accepted responsibility for the lapses during stock taking. The Tribunal found that the appellant failed to establish a strong prima facie case for total waiver of penalties. Accordingly, the Tribunal directed the appellant to deposit a specified amount towards penalties within a given period to partially waive the pre-deposit requirement for hearing the appeals.

Stay Application for Waiver of Pre-Deposit:
The appellant sought a waiver of pre-deposit of penalties for hearing the appeals. The appellant argued for the waiver based on the fully finished condition of the goods and lack of association of the partner with record maintenance. The Tribunal, after considering submissions from both sides, directed the appellant and the partner to deposit specified amounts towards penalties within a stipulated period. Upon compliance with the deposit requirement, the Tribunal partially waived the pre-deposit of the remaining penalty amounts for the hearing of the appeals and stayed the recovery process.

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