2004 (2) TMI 215 - AT - Central Excise

Summary

Issues:
Applicability of Rule 173Q to excess goods found in factory premises.

Analysis:
The appeal concerns the applicability of Rule 173Q to excess goods found in the factory premises of the respondents. The respondents, engaged in manufacturing steel re-rolled products, had 33.745 MT of Steel Ingots in excess in their factory premises compared to their statutory records. The adjudicating authority had ordered confiscation of the excess goods, imposed a redemption fine, and penalty under Rule 173Q. However, the Commissioner (Appeals) reversed this decision, stating that the excess goods were not manufactured by the respondents but received from another company. The Commissioner suggested that the respondents could only be penalized under Rule 209A. The Tribunal disagreed with the Commissioner's view, emphasizing that the respondents, as manufacturers of excisable goods, were obligated to maintain records of all goods in their premises, including the excess ones. The Tribunal noted that the respondents failed to provide any documentation regarding the procurement of these goods from the other company. The plea that these goods were inputs for final products was rejected since the Commissioner did not reverse the original order based on this argument. The Tribunal highlighted that Rule 173Q mandates excisable goods manufacturers to account for all goods in their premises, regardless of their origin.

The Tribunal referenced the case law of C.C.E., Indore v. Ajmer Food Indus., 2004 (60) RLT 297, mentioned by the learned Counsel, but found it inapplicable to the current case. The adjudicating authority's decision to confiscate the goods, impose the redemption fine, and penalty for the respondents' failure to account for the excisable goods was deemed appropriate. Consequently, the Tribunal set aside the Commissioner (Appeals) order and reinstated the original order. The appeal filed by the Revenue was accepted, affirming the applicability of Rule 173Q to the excess goods found in the respondents' factory premises.

This detailed analysis of the judgment highlights the Tribunal's interpretation of Rule 173Q, the obligations of excisable goods manufacturers, the importance of maintaining accurate records, and the consequences of failing to do so. The decision underscores the legal principles governing such cases and the significance of compliance with excise regulations.