1992 (12) TMI 157 - AT - Central Excise

Summary

Issues:
1. Seizure and confiscation of unaccounted manufactured goods.
2. Dispute over the accounting of painted but uninspected springs.
3. Alleged violation of Rule 57F in accounting for manufactured goods.
4. Confiscation and penalty imposition.
5. Quantum of fine and penalty.

Detailed Analysis:
1. The case involves the seizure and confiscation of unaccounted manufactured goods, specifically 16472 springs found at the appellant's factory. The Collector of Central Excise, Nagpur ordered a recovery of Rs. 10 lakhs towards redemption fine and imposed a penalty of Rs. 25,000. The appeal challenges this order (Order-in-Original No. 911992 dated 25-6-1992).

2. The main dispute revolves around the accounting of painted but uninspected springs. The appellant argued that the springs should only be accounted for after inspection by relevant authorities like 'RITES' for Railways and internal inspection agency for automobile springs. The appellant cited previous tribunal decisions to support the view that accountal can be made only after inspection.

3. Another issue raised was the alleged violation of Rule 57F in accounting for 1578 springs manufactured on job work basis for another company. The requirement to separately account for such goods was emphasized due to the Modvat credit implications for the supplier of inputs.

4. The tribunal found that the springs, once painted, should be considered as fully manufactured goods and must be accounted for in the RG 1 register to secure potential duty revenue. Non-accountal of these goods rendered them liable to confiscation and imposed penal liability on the appellants. Confiscation was upheld for all springs except 1440, which was viewed as a technical lapse.

5. Regarding the quantum of fine and penalty, the tribunal considered the lack of past misconduct allegations and reduced the fine to Rs. one lakh and the penalty to Rs. 10,000. The tribunal emphasized leniency due to the absence of evidence of previous misconduct and the nature of goods tailored for Railways.

In conclusion, the appeal was disposed of with the reduced fine and penalty, upholding the confiscation of unaccounted springs except for the technical lapse quantity.