2018 (2) TMI 1553 - AT - Central Excise

Excess of raw material and finished goods - confiscation of excess goods - Held that - out of total quantity of 13680 kg of finished goods it was alleged that 84 kg is found in excess. But how these goods were weighed and worksheet has not been provided to the appellant. In that circumstance being a negligible quantity of excess found goods cannot be held liable for confiscation. Revenue sought to confiscate the raw material found excess in the factory premises of the appellant. As per Rule 25 of Central Excise Rules 2002 the excisable goods are liable for confiscation. Excisable goods are the goods which are manufactured by the appellant. Admittedly the raw material has not been manufactured by the appellant - confiscation not permitted. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the excess of 84 kg of finished goods can be confiscated.
2. Whether the excess raw material found in the factory is liable for confiscation.

Issue No. 1:
The appellant contested the confiscation of 84 kg of finished goods found in excess during a search, arguing that the weighment method was disputed and no weighment worksheet was provided. The tribunal found the quantity of excess goods negligible and held that without proper documentation and verification, confiscation cannot be justified. The director disputed the weighment method, but no corrective action was taken by the Department. Consequently, the tribunal ruled in favor of the appellant, stating that the finished goods are not liable for confiscation.

Issue No. 2:
Regarding the excess raw material found in the factory, the Revenue sought confiscation based on Rule 25 of Central Excise Rules, 2002, which applies to excisable goods. However, since the raw material was not manufactured by the appellant, it could not be classified as excisable goods. Therefore, the tribunal held that the provisions of Rule 25 do not apply to the confiscation of the raw material. Consequently, the tribunal ruled in favor of the appellant, stating that the excess raw material cannot be confiscated.

In conclusion, the tribunal held that neither the finished goods nor the raw material found in excess are liable for confiscation. As a result, the redemption fine and penalty imposed on the appellant were set aside, and the appeals were allowed with any consequential relief.