1995 (3) TMI 229 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods and imposition of fine and penalty.
2. Allegations of shortage and excess of different items.
3. Discrepancies in stock records and physical stock found.
4. Duty demand on certain items found short during stocktaking.
5. Appeal against the order of the Collector of Central Excise, Allahabad.

Analysis:
1. The appeal was filed against an order confiscating goods valued at Rs. 28,85,985.36, with an option to redeem them on payment of a fine of Rs. 44,605. Duty was also demanded on certain items found short in stock, with a penalty of Rs. 50,000 imposed under Central Excise Rules, 1944. The appellants contested the allegations of shortage and excess, arguing that discrepancies were due to their practice of recording Enamels as R.M. Paints. The department had accepted this practice during investigations. The Tribunal considered the submissions and discrepancies in detail.

2. The Collector had observed discrepancies in stock records, noting excess in Enamels and shortage in Primer. The appellants maintained that Enamels were recorded as R.M. Paints, supported by their Director's statement and classification lists. The Tribunal found that the stocktaking report only recorded excess in Enamel, not in R.M. Paints. As the department had acknowledged the practice and directed provisional release based on it, the confiscation of Enamels was deemed unsustainable.

3. Regarding N.C. Lacquer and Primer, the excess of 2,491.700 litres was incorrectly treated as excess in the order. The actual excess was 248.500 litres, as per the stocktaking report. The shortage of varnish and insulating varnish was admitted, while the excess of knifing paste was adjusted against the shortage of Knifing Putty. The duty demand was reduced accordingly based on the corrected calculations.

4. The Tribunal reduced the fine amount to Rs. 5,000 and penalty to Rs. 5,000, considering the reduction in duty demand and value of excess goods. The appeal was partially allowed, and the impugned order of the Collector was modified correspondingly.

5. The cross-objection by the department was dismissed as it did not present any new grounds for modification beyond those already considered in the appeal.