2000 (7) TMI 327 - AT - Central Excise

Summary

Issues:
1. Excess stock of wall clocks and cabinets found during inspection.
2. Confiscation and demand of Central Excise Duty.
3. Appeal against the order of the Commissioner (Appeals).

Issue 1: Excess Stock and Shortage of Wall Clocks and Cabinets
The Central Excise Officers visited the factory premises of the appellants and found discrepancies in the stock. They discovered an excess of 4950 pieces of wall clocks and a shortage of 4390 pieces of wall clock cabinets. Additionally, 18,903 pieces of clock movements were found short during the verification process. The Deputy Collector of Central Excise ordered the confiscation of the excess wall clocks, confirmed the duty on the short wall clock cabinets, and demanded the duty/Modvat credit on the clock movements. The appellants argued that the excess wall clocks were manufactured just before the visit and were yet to be entered in the register. They claimed that the shortage of cabinets was not real as they were used in the excess clocks. Regarding the shortage of clock movements, they cited Rule 57D(1) to support their contention that credit should not be denied due to wastage during manufacturing.

Issue 2: Confiscation and Demand of Central Excise Duty
The Deputy Collector ordered the confiscation of the excess wall clocks and demanded Central Excise Duty on the short wall clock cabinets and clock movements. The appellants appealed, stating that the excess clocks were recently manufactured and the shortage of cabinets was due to their use in the excess clocks. However, the authorities dismissed these explanations, noting that the appellants failed to provide sufficient evidence to support their claims. The Deputy Collector observed that the excess wall clocks were packed and ready for sale at the time of seizure, contradicting the appellants' claim that they were yet to be entered in the register. The authorities also found the explanation for the shortage of clock movements unconvincing, as the appellants did not maintain records of waste or disposal, leading to the confirmation of the duty demand.

Issue 3: Appeal Against the Commissioner (Appeals) Order
The appellants appealed to the Commissioner (Appeals) after the Deputy Collector's decision, but their appeal was dismissed. The present appeal was against the Commissioner (Appeals) order. During the appeal hearing, the appellants reiterated their arguments regarding the excess stock and shortages. The Tribunal carefully considered the submissions and confirmed the findings of the lower authorities. They set aside the duty demand on the wall clock cabinets but reduced the penalty imposed on the appellants. Ultimately, the appeal was dismissed, upholding the order of the Commissioner (Appeals) with modifications to the penalty amount.

This judgment highlights the importance of maintaining accurate records and providing substantial evidence to support claims during excise duty proceedings. The Tribunal emphasized the need for proper documentation to reconcile discrepancies in stock and upheld the duty demand based on the lack of convincing explanations and evidence from the appellants.