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TMI Blog2002 (10) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, 1944 besides imposing penalty of Rs. 84,466 under Section 11AC of the Central Excise Act read with Rule 57-I(4) and confiscated the finished final products and raw materials found in excess with an option to them to redeem the same on payment of fine of Rs. 5 lakhs. 2. Shri Ravi Raghvan, learned Consultant, submitted that the appellants manufacture Veneers (decorative and face Veneers), Commercial and Decorative Plywood, Black Boards, Inlay Veneer Strips, Veneer Fibre Board and Wooden Edge Lipping Patti of various sizes, thickness and quality; that Central Excise Officers, on 11-2-99 ascertained the stock position in the factory and in godown opposite factory premises and seized finished goods worth Rs. 15,14,423 and raw material va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered as excess stock in comparison to RG-I; that there was no excess of raw material as it is the practice in their unit that quantity of raw materials is subtracted from RG 23 - Part I only after ascertaining the actual quantity utilised in the manufactured goods and such debit entries are made periodically; that thus, factually, there was no excess stock in RG 23A Part-I Register. The learned Advocate also contended that as there was no intention to evade payment of duty on their part, the goods were not liable for confiscation; that there is no act on their part which remotely suggests that they have acted mala fidely with intention to avoid the payment of duty. He relied upon the decision in P.R. Auto Industries v. C.C.E., New Delhi, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty , which is found in clause (d) thereof. It can, therefore, be prima facie, assumed that the liability in terms of Rule 173Q (1), sub-clauses (a), (b) and (c) does not depend upon mens rea. 5. I have considered the submissions of both the sides. The shortage of finished goods and raw materials in respect of which Modvat credit had been taken by the appellants has not been disputed. Similarly the excess of goods found by the officers at the time of visit of the factory premises has not been disputed by the appellants. They have only submitted explanation for the same. In fact, in respect of shortage noticed in Decorative Veneer, the appellants have not been able to give any explanation as even in Memorandum of Appeal they have only ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured, produced or stored are not accounted for. As held by the Bombay High Court in Kirloskar Brothers case, liability in terms of clauses (a) and (b) of sub-rule (1) of Rule 173Q does not depend upon mens rea. Accordingly the goods found in excess are liable for confiscation as well as penalty is imposable on the appellants. However, considering the facts and circumstances of the matter, I agree with the learned consultant that the penalty imposed and redemption fine demanded are on higher side and there is no warrant for imposing the penalty both under Section 11AC of the Central Excise Act and under Rule 173Q of the Central Excise Rules. I, therefore, reduce the entire penalty to Rs. 25,000/- and the redemption fine to Rs. 1 lakh only. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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