2000 (2) TMI 263 - AT - Central Excise

Summary

Issues:
1. Excess stock in the godown.
2. Non-maintenance of production accounts correctly.
3. Undervaluation of goods seized from the Depot of a buyer.

Excess Stock in the Godown:
The appeals by the Commissioner revolve around the excess stock found in the godown, which was 942 Kgs against the accounted stock of 2,31,083 Kgs. The Commissioner (Appeals) allowed the appeal, noting that the excess was minimal, around 0.004%. The Commissioner found that the excess might be due to an error in estimation rather than intentional wrongdoing. The Tribunal upheld the Commissioner's findings, stating that for commodities like paper, such minor discrepancies in stock verification could occur, and the grievance lacked a substantial basis.

Non-Maintenance of Production Accounts Correctly:
The appeal also raised concerns about the respondent's alleged violation of Central Excise Rules by not properly entering daily productions in the RG 1 Register. The respondents explained that goods were not entered in the register as they had not been packed or weighed yet. They argued that the excess stock was a result of estimation error rather than deliberate malpractice. The Tribunal agreed with the respondents, emphasizing that without proper weighing and packing, the quantity could not be accurately determined for entry in the RG 1 Register.

Undervaluation of Goods Seized from the Depot:
Regarding the undervaluation of goods seized from the Depot of a buyer, the appeal contended that evidence of cash payments indicated a need to reassess the original clearance price. However, the Tribunal found that the investigation did not establish a clear case of undervaluation. The seized goods were partly from the respondent and another dealer, making it challenging to determine the correct value. The Tribunal noted that no correlation was made between alleged cash payments and the seized goods, and the prices were not sorted by variety. As a result, the Commissioner (Appeals) was justified in dismissing the demand for under-valuation, ruling that the investigation failed to substantiate the case.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the appeal and emphasizing that the investigation did not establish the alleged violations conclusively.