2018 (5) TMI 866 - AT - Central Excise

Clandestine removal - excesses of stock - Confiscation - penalty - Held that - apart from the fact that goods were not found entered in the RG 1 register, there is virtually no evidence to indicate that the same were meant for clandestine removal - a part of the goods were found hot than room temperature. This indicate that the same were of recent production and were yet to be entered during the course of day - confiscation and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of finished goods and raw material
2. Imposition of penalty on the manufacturing unit and the director
3. Appeal against the order of the original adjudicating authority

Confiscation of Finished Goods and Raw Material:
The Central Excise officers visited the appellant's factory engaged in manufacturing copper rods and found discrepancies in the records. 3109.300 Kgs of copper rods were not entered in the statutory records, and 7155.92 Kgs of copper wire bars were in excess of the recorded balance. The Additional Commissioner ordered the confiscation of the final product and raw material, with an option for redemption on payment of fines. The appellant argued that the unrecorded goods were not meant for clandestine removal but were recent productions awaiting entry in the records. The Tribunal found no evidence of clandestine activities and set aside the confiscation orders, citing the law that raw material cannot be confiscated solely for not being entered in records.

Imposition of Penalty:
The manufacturing unit faced penalties under Rule 25 of Central Excise Rules, with a separate penalty imposed on the director of the company. The appellant appealed against these penalties, arguing that there was no justification for the confiscation or penalties. The Tribunal, after considering submissions from both sides, found that there was no evidence to support the penalties imposed. Consequently, the Tribunal set aside the penalties along with the confiscation orders.

Appeal Against Original Adjudicating Authority's Order:
The manufacturing unit appealed against the order of the original adjudicating authority, which was upheld initially. The Tribunal, upon review, found no justifiable reason to uphold the impugned orders. Therefore, the Tribunal allowed the appeal with consequential relief, setting aside the confiscation orders and penalties imposed on the manufacturing unit and the director.