2007 (9) TMI 59 - AT - Central Excise

Confiscation And penalty - During search officers found the goods in excess of the stock but irrespective to seize on that date, the goods were seized after few days and the goods were entered in the RG-1 register on that date - Held that goods not liable for confiscation and revenue appeal set aside

Summary

Issues:
1. Confiscation of excess finished goods not accounted for in daily stock account under Rule 25 of Central Excise Rules, 2002.
2. Seizure of goods without jurisdiction/authority of law.
3. Applicability of penalties and redemption fine under Rule 25.

Analysis:
1. The Commissioner (Appeals) allowed the Respondent's appeal based on the interpretation of Rule 25 of Central Excise Rules, 2002. The Commissioner noted that the unaccounted goods are considered offending goods liable to confiscation only until they are properly recorded. Citing the case of National Plastics (I) Ltd. v. CCE- 2004 (166) E.L.T. 488 (1), it was held that goods entered in the RG-1 register were not liable to confiscation. Consequently, the redemption fine and penalties under Rule 25 were set aside as there was no contravention once the goods were accounted for.

2. The Appellate Tribunal found no merit in the Revenue's appeal, as there was no dispute about the factual position. The Tribunal highlighted that the goods were not seized on the initial date of stock checking due to the absence of a reasonable belief for their seizure. The subsequent seizure on a later date was deemed without authority of law since there was no contravention at that time. The Tribunal emphasized that the goods had been properly entered in the RG 1 register and could not be held liable to confiscation on the subsequent seizure date.

3. Considering the above findings and the absence of any infirmity in the Commissioner (Appeals) order, the Appellate Tribunal rejected the Revenue's appeals. It was concluded that the penalties imposed on the appellants could not be sustained in the absence of any contravention once the goods were properly recorded in the prescribed register.

This comprehensive analysis of the judgment addresses the issues of confiscation, seizure without authority, and the applicability of penalties and redemption fine under Rule 25 of the Central Excise Rules, providing a detailed breakdown of the Tribunal's decision and the reasoning behind it.