1992 (9) TMI 186 - AT - Central Excise

Summary

Issues: Alleged violation of Central Excise Rules regarding storage and removal of dyestuff, classification of goods as finished or semi-finished, confiscation of seized goods, redemption fine, and penalties imposed.

Analysis:

1. The case involved the appellants, engaged in manufacturing Reactive dyes, facing allegations of violating Central Excise Rules by storing dyestuff outside the prescribed room and removing goods without payment of duty. The officers seized the dyestuff and records, leading to a show cause notice based on misdeclaration and illicit removal of goods.

2. The Additional Collector, in the impugned order, held that the seized goods were finished and marketable, ordering confiscation under Rule 9(2) of the Central Excise Rules. He allowed redemption of a portion of the seized goods upon payment of fines and imposed penalties on the appellants for the alleged violations.

3. The appellants contended that the seized dyestuff was semi-finished and not marketable, as it required further processing according to customer specifications, citing guidelines and manuals. They denied clandestine removal of goods and challenged the Chemical Examiner's findings regarding marketability.

4. The Revenue argued that the seized goods were certified as finished excisable goods by the Chemical Examiner, emphasizing that customer-specific processes did not equate to basic manufacturing processes like pulverisation, supporting the Additional Collector's order.

5. The Tribunal examined whether the seized dyestuff had reached the stage for commercial sale, noting the appellants' argument that completion of all processes, including blending as per customer requirements, was necessary for classification as finished excisable goods under Tariff Item 14-D.

6. Considering the storage location, lack of entries in registers, and Chemical Examiner's report certifying marketability, the Tribunal agreed with the Collector that the seized goods were fully manufactured excisable goods, rejecting the appellants' claim that blending for customer needs was essential for completion of manufacturing.

7. Upholding the Collector's finding of Rule violations and confirming the confiscation of seized goods, the Tribunal reduced the redemption fines and set aside the penalties imposed on the appellants, considering the circumstances of the case.

8. Ultimately, the appeal was disposed of with the decision to uphold the confiscation but reduce the fines imposed on the appellants, indicating a partial relief granted by the Tribunal based on the analysis of the evidence and legal arguments presented in the case.