2005 (10) TMI 188 - AT - Central Excise

Summary

Issues: Non-accountal of goods in RG - 1 register, Imposition of penalty under Rule 226 of the Central Excise Rules, 1944

Non-accountal of goods in RG - 1 register:
The case involved the non-accountal of goods in the RG - 1 register by the appellant. The appellant contended that the grey fabric was duly recorded in the lot register but was not subsequently entered in the RG - 1 register. It was argued that there was no attempt to remove the goods from the factory premises, and the goods were not fully finished at the time. The appellant cited precedents where it was held that in such cases, no penalty could be imposed under Rule 173G, and the maximum penalty under Rule 226 is Rs. 2000 only. The Revenue acknowledged that the goods were unaccounted for in the Form - IV register as admitted by the partner of the firm.

Imposition of penalty under Rule 226 of the Central Excise Rules, 1944:
The appellant relied on the provisions of Rule 226 to argue that the maximum penalty that could be imposed for non-accountal of goods was Rs. 2000. The Tribunal referred to previous decisions where it was held that when goods are lying in the factory but not accounted in RG-1, and there is no evidence of an attempt to clear the goods without payment of duty, confiscation and redemption fine would be set aside. The Tribunal found that there was no intention on the part of the appellant to remove the goods, as no evidence was presented to prove otherwise. Consequently, the Tribunal agreed with the appellant that a penalty of Rs. 2000 under Rule 226 was appropriate in this case.

In conclusion, the Tribunal partially allowed the appeal and imposed a penalty of Rs. 2000 under Rule 226 on the appellant for the non-accountal of goods in the RG - 1 register. The judgment highlighted the importance of proper record-keeping and compliance with statutory requirements in excise matters.