2008 (5) TMI 110 - AT - Central Excise

Confiscation on account of excess & shortage of goods found during verification of stock manner or the methodology of stock verification not disputed by assessee - assessee plea that mere non accountal of goods in RG-1 register is not sufficient to prove clandestine removal, is not acceptable stock verification by dept. can t be challenged mere for the fact that Panchnama does not bear the signature of excise representative of the appellant confiscation, fine and penalty are sustainable

Issues:
1. Confiscation of goods with option of redemption fine and penalty imposition.
2. Alleged mix-up of goods leading to excess stock and shortage.
3. Lack of mens rea for clandestine removal of goods.
4. Discrepancy in stock verification and RG-I Register.
5. Validity of Panchnama and representative's objection.
6. Applicability of cited cases.
7. Conclusive findings and absence of legal errors.

Analysis:
1. The appeal challenged the order confiscating goods with an option of redemption fine and imposing a penalty. The Assistant Commissioner had confiscated 16.037 MTs of Writing & Printing Paper, allowing redemption on payment of Rs. 10,000 and imposing a penalty of Rs. 5,000 under Rule 25 of the Central Excise Rules, 2002.

2. The appellant, engaged in paper product manufacturing, faced allegations of excess stock of Writing & Printing Paper and a shortage of News Print Paper during a search at their premises. The discrepancy led to a show cause notice and subsequent adjudication resulting in the impugned order.

3. The appellant argued lack of mens rea for clandestine removal, attributing the excess stock to a mix-up by laborers. They contended that the absence of proof of intent should preclude punitive action, citing the Supreme Industries Ltd. and Citizen Extrusion cases to support their stance.

4. The Revenue highlighted the admission by the Excise Incharge and Authorized Signatory regarding the excess stock. They emphasized the presence of the representative during stock verification and dismissed the appellant's objections to the methodology, asserting that the discrepancy in the RG-I Register indicated an intent for clandestine removal.

5. The Presiding Officer found the Revenue's submissions well-founded, emphasizing the representative's presence during stock verification. The absence of objections raised by the representative on-site undermined the significance of the unsigned Panchnama. The discrepancy between stock verification and the RG-I Register was deemed indicative of intent for clandestine removal.

6. The Tribunal concluded that the appellant's case lacked merit, citing the concurrent findings and absence of legal errors in the impugned order. The differences between the cited cases and the present matter rendered them irrelevant to the appellant's defense.

7. Ultimately, the appeal was dismissed based on the Tribunal's assessment of the evidence and arguments presented, affirming the validity of the impugned order and the absence of legal errors justifying a different inference.

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