1997 (8) TMI 140 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods under Rule 209 read with Rule 226 of Central Excise Rules.
2. Alleged discrepancies in stock records and physical stock.
3. Applicability of Rule 209 sub-rules.
4. Validity of explanations for discrepancies.
5. Imposition of fine and penalty.

Analysis:

1. The appeal challenged an order confiscating goods and imposing penalties under Rule 209 read with Rule 226 of the Central Excise Rules. The Collector confiscated 47 boxes of Polypropylene Multifilament yarn due to discrepancies found during checks by Central Excise Officers. The discrepancies included unaccounted cartons, weight variations, and serial number duplications, which were attributed to errors in stock records. The appellant was directed to pay a fine of Rs. 30,000 and a penalty of Rs. 25,000.

2. The appellant contended that the alleged discrepancies were genuine errors due to the large quantity of goods handled. They argued that no rules were contravened as the goods were not removed without payment of duty. The appellant's submissions were dismissed by the Collector, leading to the appeal. The appellant sought to set aside the impugned order based on the explanations provided.

3. The Tribunal analyzed the sub-rules of Rule 209 to determine their applicability in the case. While sub-rules (a), (bb), (bbb), and (d) were discussed, the focus was on sub-rule (b) concerning non-accounting of manufactured goods. The appellant argued that as the goods were physically available, they were not unaccounted for. However, the Tribunal disagreed, stating that non-accounting referred to goods not recorded in statutory records, even if physically present.

4. The Tribunal addressed the validity of explanations for discrepancies, emphasizing the requirement to provide data in the format required by Central Excise Officers. The appellant's claim of errors in the computer report preparation was not accepted fully, although some reduction in fine and penalty was warranted due to admitted discrepancies and the explanation provided.

5. Ultimately, the Tribunal modified the impugned order, reducing the fine and penalty to Rs. 10,000 each. While acknowledging errors in stock records, the Tribunal upheld the confiscation of goods and imposition of penalties under Rule 209. The appeal was partly allowed, reflecting a reduction in the quantum of fine and penalty based on the circumstances of the case.