2017 (12) TMI 220 - AT - Central Excise

Clandestine removal - shortages and excesses of goods - installed capacity of production of the machines - Held that - the Department has not produced any other evidence to show that the appellant had the motive or intention to remove the excess found stock without payment of duty. Therefore, non-maintenance of record under the facts and circumstances of the case, cannot lead to the conclusion that the same are liable for confiscation - the question of duty payment arises only on removal of the finished goods, which in the present case, has not been removed from the factory by the appellant. The original authority has directed the appellant to make necessary entries in the RG-I Register for the excess goods found in stock. Since the issue involved in the present case relates to confiscation of excess found finished goods and the same, is not proper and justified. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Confiscation of excess finished goods
- Imposition of penalty and redemption fine

Analysis:
- The case involved the appellant, engaged in manufacturing PVC products, facing duty demands and penalties due to discrepancies in finished goods during a physical verification by Central Excise Officers. The appellant contested the excess finished goods charge, arguing that the RG-I Register was not updated on the day of the visit, and the goods were not removed from the factory, citing a similar case precedent.
- The Revenue, represented by the DR, maintained that the excess goods were beyond the production capacity and not recorded properly, indicating an intent to evade duty. The DR emphasized that the statement of the appellant's authorized officer was not retracted.
- The Tribunal considered the non-maintenance of the RG-I Register on the day of the visit reasonable, given the circumstances. Lack of evidence of intent to evade duty led to the conclusion that confiscation was not justified. Referring to a similar case, the Tribunal highlighted that goods remaining within the factory do not warrant confiscation.
- The Tribunal found no merit in the impugned order confiscating the finished goods and imposing fines, leading to the appeal being allowed in favor of the appellant. The decision was pronounced on 24/11/2017 by Member (Judicial) S.K. Mohanty.