1990 (11) TMI 241 - AT - Central Excise

Summary

Issues:
- Confiscation of goods under Rule 226
- Correctness of entry in RG1 register
- Excessive fine imposed in lieu of confiscation
- Maintenance of records in RG1 form
- Technical lapses in record-keeping

Confiscation of Goods under Rule 226:
The case involved the confiscation of goods by the Collector of Central Excise, Meerut, under Rule 226. The appellants argued that due entry had been made for 15,000 pieces in the RG1 Register, which was verified and correct. They contended that these goods could not be confiscated under Rule 226. However, the remaining 15,445 pieces found in the finishing room were seized and confiscated. The appellants argued that confiscation of these goods was illegal as the entry for them was not yet due when the seizure took place.

Correctness of Entry in RG1 Register:
The appellants maintained records in RG1 form instead of RG 12(A) as required. The Collector acknowledged this practice from 22-10-1984 to 25-8-1985. Despite the mistake, the Collector noted that the fact of clandestine removal was not proven, and a significant number of bottles were still in the finishing room. The Collector also recognized that the irregular practice was known to departmental officers, mitigating the gravity of the offense. The appellants contended that the goods were not liable for confiscation as the mistakes were technical in nature and not substantial.

Excessive Fine Imposed in Lieu of Confiscation:
The appellants argued that the fine imposed in lieu of confiscation was excessive. They contended that the maximum penalty of Rs. 2,000 was not warranted, especially considering that the lapses were of a technical nature and had been acquiesced in by the Excise Authorities. The appellants believed that the Collector should have taken a lenient view and simply rectified the mistakes without confiscating the goods or imposing penalties.

Maintenance of Records in RG1 Form:
Throughout the material time, the appellants maintained records in RG1 form instead of RG 12. The Excise authorities were aware of this practice and had acquiesced in it. The appellants argued that this should not have been a basis for confiscation or imposition of penalties, especially considering that the records were being maintained under the guidance of Excise Officers.

Technical Lapses in Record-Keeping:
The Tribunal considered the technical lapses in record-keeping by the appellants. Despite the incorrect maintenance of records in RG1 form, the Collector acknowledged that there was no proof of clandestine removal and that a significant number of bottles were still in the finishing room. The Tribunal concluded that the technical nature of the offense, coupled with the plausible explanation given by the appellants and the knowledge of the irregular practice by departmental officers, did not warrant confiscation of goods or imposition of penalties. As a result, the Tribunal set aside the confiscation and accepted the appeal.