2003 (12) TMI 147 - AT - Central Excise

Summary

Issues involved: Interpretation of Rule 209 of the Central Excise Rules regarding confiscation and penalty for excess raw material found during a factory visit.

Summary:
The Revenue's appeal before the Appellate Tribunal CESTAT, New Delhi was based on the excess raw material found during a factory visit for the manufacture of LPG. The adjudicating authority had ordered confiscation under Rule 209 and imposed a penalty, which was not upheld by the appellate authority. The Commissioner (Appeals) also ruled out confiscation under Rule 209(1)(b).

In the appeal, the invocation of Rule 209(1)(b) was considered justified by the Revenue, as it applies when a manufacturer does not account for excisable goods. However, it was argued that the respondent, in this case, was not the producer, registered person, or dealer but merely a user of the goods. As per the definition in Section 2(d) of the Central Excise Act, the goods received by the respondent after duty discharge do not fall under excisable goods.

The Tribunal concluded that since the goods were received after duty discharge, they do not qualify as excisable goods, and therefore, Rule 209(1)(b) does not apply. Consequently, the Revenue's appeal was rejected by the Tribunal.