2016 (10) TMI 737 - AT - Central Excise

Intention to remove the goods without the payment of duty - non-accountal of goods in the RG-1 register - search in the premises - confiscation of goods with an option to redeem the goods on payment of redemption fine - imposition of penalty u/r 25 of the Central Excise Rules 2002 - Held that - confiscation of the excess found goods has been upheld on the ground that same were neither entered in form IV register or lot register or RG I register. Though the appellants have argued that goods were yet to be entered in RG I register as the same were still to be inspected by the DGS&D department but I find that even in their memo of appeal there is no ground relatable to non-entry of goods in form IV register or lot register. As such it cannot be said to be a mere case of non-entry in RG I register. Admittedly on receipt of raw materials i.e grey fabrics the same are required to be entered in the raw materials register as also the lot register. Non entry of the same in the statutory documents would admittedly lead to appellants malafide that same were meant for clandestine clearance - malafide intention upheld - confiscation upheld - appeal rejected - decided against appellant.

Summary

Issues:
1. Confiscation of unaccounted processed fabrics.
2. Confiscation upheld by appellate authority.
3. Non-entry of goods in statutory documents.
4. Appeal dismissal.

Analysis:
1. The appellant, engaged in manufacturing fabrics, had unaccounted processed fabrics seized during a search. The discrepancy in stock led to the confiscation of 9,933.75 Mtrs of fabrics valued at &8377; 5,96,025. The appellant admitted non-entry of processed fabrics in various registers, indicating an intention to evade duty. The appellate authority upheld the confiscation, emphasizing the lack of entries in essential registers, establishing intent to clear fabrics without payment of duty.

2. The appellate authority rejected the appellant's explanation that unaccounted fabrics were meant for government departments requiring DGS&D inspection. The appellant failed to provide evidence linking the seized goods to specific government orders or DGS&D inspections. Consequently, the confiscation of 1,902.95 Mtrs of fabrics valued at &8377; 1,14,777 was upheld for non-entry in the RG-1 register, indicating an intent to clear goods without duty payment.

3. The appellate authority affirmed the confiscation and penalty imposition under Rule 25 of the Central Excise Rules, 2002, for the entire quantity of unaccounted processed fabrics. The judgment highlighted the significance of maintaining accurate records in statutory documents to prevent clandestine clearance and duty evasion. The dismissal of the appeal reinforced the importance of proper documentation and adherence to regulatory requirements to avoid malafide intentions.

4. The dismissal of the appeal on 06-10-2016 underscored the seriousness of non-compliance with statutory documentation requirements and the consequences of unaccounted goods in the manufacturing process. The judgment serves as a reminder of the legal obligations and repercussions for failing to maintain accurate records and comply with excise regulations, ultimately upholding the confiscation and penalty imposed on the appellant.