1998 (3) TMI 331 - AT - Central Excise

Stock taking - Excess stock held to be not accounted for by the lower authorities in the statutory records

Summary

Issues:
Appeal against fine and penalty for excess stock of finished goods.

Analysis:
The case involves an appeal by a manufacturer of plastic films and pouches against a fine and penalty imposed for the detection of excess stock of finished goods during a routine check by Central Excise officers. The appellant argued that the excess goods were awaiting inspection and packing before entry into statutory records, thus not yet at the RG 1 stage. The Revenue, represented by the JDR, contended that the excess stock was admitted by the appellant's director and was already inspected once, justifying the confiscation and penalty under Rule 53 read with Rule 173G.

The Tribunal considered the statements made by the director of the appellant's company, acknowledging the excess stock of printed plastic pouches. The director's statement detailed the manufacturing process, indicating that goods are entered into RG 1 only after inspection, packing into cartons, and wrapping with plastic strips. The excess stock detected was loose, not in cartons or wrapped, signifying they were not yet at the stage for entry into RG 1. Therefore, the Tribunal concluded that the goods were not unaccounted for as they had not reached the RG 1 stage, rendering the confiscation and penalty unjustified. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant with consequential relief.