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TMI Blog2010 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... dents herein are engaged in manufacture of various products, which are, excisable goods failling under Chapters 22, 28, 29, 34, 38 and 39 of the Central Excise Tariff Act, 1985 and are also availing modvat facility under Rule 57A of the Central Excise Rules, 1944 (herein after for the brevities sake referred to as "the Rules"). In so far as the present proceedings are concerned, the goods in question are 672 bags of sodium salt. The officers of the AppellantRevenue during the routine P.B.C. Checks conducted on 12.4.1994 in the factory premises of the Respondents found that the finished stock of 24D sodium salt duly packed and in stitched condition in plastic bags with complete marking on it totally numbering 672 bags weighing 16800 kgs, valued at Rs.11,08,800/were lying in the packing section of the auxiliary department of the factory premises of the Respondents. The officers of the Appellant on reconciliation/comparison with Central Excise statutory records i.e. RG I register found that there was balance of only 400 kgs of the said product in B.S.R. and also in RG I register, whereas the said goods comprising 672 bags weighing 16,800 kgs. were not taken into account while maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscation of 672 bags. However, since the said goods were provisionally released on execution of bond for full value and since the same were not physically available for confiscation, the Adjudicating Authority imposed redemption fine of Rs.1,11,000/under Section 34 of the said Act and directed appropriation of the same from the bank guarantee. The Adjudicating Authority confirmed the Basic Central Excise Duty amounting to Rs.2,21,760/paid by the Respondents at the time of clearance of 672 bags. The Adjudicating Authority imposed penalty of Rs.30,000/on the Respondents under Section 173Q(1) of the said Rules. 4 Aggrieved by the said Order in Original dated 6/6/1996, the Respondents filed an Appeal before the Commissioner (Appeals). The Commissioner (Appeals) by order dated 29/12/1999 allowed the Appeal filed by the Respondents. The Appellate Authority recorded a finding that since there was no finding recorded by the Adjudicating Officer in the Order in Original of clandestine removal and intention to evade duty, the Appellate Authority was of the view that it could not uphold the confiscation of the seized goods, however, it was of the view that the penalty can be imposed by reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents that the goods were not approved by the buyer. The said point was never raised before the Adjudicating Authority and, therefore, could not be raised at the stage of Second Appeal as the same entails a finding to be recorded on facts; v) That the Tribunal erred in recording a finding that since the goods were not approved by the buyer, the said goods cannot be said to be fully finished and, therefore, require no entry in the RGI Register. The Tribunal failed to appreciate that once the manufacturing takes place, the goods are required to be entered in the RGI Register. vi) That the Tribunal erred in adjudicating the appeal on other grounds than the grounds on which the appeal was allowed by the Commissioner (Appeal). The Commissioner (Appeal) had only allowed the appeal on the ground that no finding of clandestine removal and intention to evade duty was alleged to be found. vii) On the point of 'Preparation' and 'attempt' the learned counsel for the Appellant sought to rely upon the judgment of the Apex Court in the case of State of Maharashtra v/s. Moh. Yakub and others reported in 1983(13) ELT 1637 (SC) and in the case of Narayandas Bhagwandas Madhavdas v/s, State of We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such goods shall be deemed to be a warehouse [registered] under Rule 140] (4) The manufacturer shall maintain an Entry Book in the proper Form in which he shall on the same day on which goods are deposited in or removed from such storeroom or other place of storage, write and enter in the proper column the date of such deposit or removal, the full description, quantity, weight and value of the goods so deposited or removed, the number of and the marks and numbers on, the packages (if any) in which they are contained and such other particulars as the [Commissioner] may by general or special order require. [(5) Notwithstanding anything contained in subrule (1), the Central Board of Excise and Customs may, in exceptional circumstances having regard to the nature of the goods and shortage of storage space at the premises of the manufacture where the goods are made, permit a manufacturer to store his goods in any other place outside such premises, without payment of duty subject to such conditions as it may specify; and the provisions of subrules (2) to (4) shall apply to such place of storage as they apply for storage of goods in a store room or other place of storage within the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, or to deliver it up to the officer on demand or who obstructs or hinders such officer in making any minute therein or extract therefrom, or conveys away or conceals it, or destroys or tears our any leaf therefrom, or makes any false entry therein or fraudulently alters any entry therein, shall be liable to a penalty which may extend to two thousand rupees and all the goods of which due entry has not been made in such book [account or register] shall be liable to confiscation. Rule 223B. Declaration of stock of goods and information regarding the serial number of the last gate pass issued at 6.00 P.M. on the day preceding the Budge day.( 1) A [registered person] shall furnish to the proper officer a declaration in writing in such form and in such manner as the [Commissioner] may require regarding the stock of excisable goods remaining in a factory, warehouse or storeroom [registered] or approved for the storage of such goods, and the serial number of the last gatepass issued as remained, at six `O' clock in the afternoon of the day preceding the day appointed for the presentation of the annual or any Supplementary Budge of the Central Government to the Parliament or for the intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods without having applied for the [registration certificate] required under Section 6 of the Act; or (d) contravenes any of the provisions of these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the [manufacturer, producer, registered person of a warehouse or a registered dealer], as the case may be, shall be liable to a penalty not exceeding three times the value of the excisable goods in respect of which any contravention of the nature referred to in clause (a) or [clause (b) or [clause (bb) or clause (bbb)] or clause (c) or clause (d) has been committed, or five thousand rupees, whichever is greater. [ExplanationFor the purposes of clause (bb) of subrule (1), a person availing of credit of duty on inputs received by him shall be deemed to have taken "reasonable steps" if he satisfies himself about the identity and address of the manufacturer or supplier, as the case may be, issuing [invoice] or any other document approved under these rules evidencing the payment of excise duty or the countervailing duty, as the case may be, either( a) from his personal knowledge; or (b) on the strength of a certificate given by a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contravened the aforesaid statutory provisions. It was also noticed from the records of the Respondents that the seized goods were manufactured 45 days prior to the date of seizure and, in spite of the same, they were not accounted for in the RGI register and, therefore, it was ex facie clear that though the goods under seizure were fully processed manufactured, they were not accounted for in the RGI Register, though the Respondents had ample time to do so from the date of manufacture till the time when the officers of the Appellant visited the factory premises of the Respondents. In the light of the material that was on record, the Adjudicating Authority, in the Order in Original had recorded a finding that the above mentioned rules had been contravened and that the goods were liable for confiscation. However, since the goods were provisionally released on execution of bond for full value of the seized goods and since the same were liable for confiscation, the Adjudicating Authority directed the Respondents to pay redemption fine of Rs.1,11,000/under section 34 of the Act. The Adjudicating Authority also imposed a penalty of Rs.30,000/on the Respondents which was directed to be ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the CESTAT adopted a strange way of disposal of the appeal. The CESTAT has also proceeded on the basis that since there is no confirmation from the buyer that the goods were as per its specifications and yet the Respondents failed to enter the production in the RG1 and since there was no entry of the said goods in the RG1, consequent failure and penal consequences do not arise. The CESTAT observed that the entire process of adjudication being based on assumptions and presumptions and the Commissioner (Appeals) was therefore right in setting aside the order in appeal. Thus, as can be seen, the CESTAT has disposed of the Appeal on a ground which was not urged by the Respondents before the Adjudicating Authority. Thereby the CESTAT has disposed of the Appeal on a totally new ground which was not before the Adjudicating Authority and which would entail a finding on facts. If the CESTAT was not satisfied with the approach of the Adjudicating Authority, the least it could have done, was remanding the matter back to the Adjudicating Authority but could not have assumed to itself the jurisdiction to decide the Appeal on a ground which was not urged before the lower authorities. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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