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TMI Blog2013 (4) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... nfiscation of goods found in excess of recorded stock. However tribunal reduce the redemption fine. In the matter of finished goods found short, tribunal is of the view that in the facts and circumstances of the case the finished goods recorded in books but not found have to be considered as cleared without payment of duty. So the demand for duty is maintainable. Further penalty equal to duty involved is imposable under provisions of Section 11AC of the Act. However tribunal give an option to the respondent to pay 25% of this duty amount within 30 days of receipt of this order for final closure of the matter as per provisions in Section 11AC of the Act. The appeal filed by Revenue is allowed partially. - E/119/2009-SM(BR) - 775/2012-SM(BR)(PB) - Dated:- 20-6-2012 - Shri Mathew John, J. REPRESENTED BY : Shri B.L. Soni, SDR, for the Appellant. Shri O.P. Ojha, Consultant, for the Respondent. [Order]. The respondents are manufacturers of various products of mild steel. On 12-10-2006, the officers of Central Excise visited the factory of the respondents and conducted verification of physical stock as compared to accounted stock. They found discrepancies as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the quantum of clearances that is permitted to be cleared without payment of duty in a financial year. Once the seized goods are accounted they had to start paying duty on further clearances. The submission of Revenue is that in such circumstances the availability of unaccounted raw material and final products showed the intention of the respondent to clandestinely manufacture and remove goods. It is further argued that where goods are not accounted in the books of account to be maintained for accounting stock of finished goods, such goods are liable to confiscation irrespective of the fact whether intention to evade payment of duty is proved or not. They rely on the following decisions : (a) Dhanraj Enterprises v. CCE, Indore - 2006 (199) E.L.T. 518 (T) (b) Unique Butyl Tube Industries Pvt. Ltd. - Final Order No. 1465/2008-SM(BR), dated 28-8-2008 passed by CESTAT, New Delhi in appeal number E/1027/2006-SM(BR). 7. Revenue also argues that where finished goods are found short, demand for duty for such goods not found is maintainable and penalty under Section 11AC is imposable even without proof regarding removal of such goods without payment of duty. Revenue relies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable 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 or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or rupees two thousand, whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice. 12. Now the issue to be examined is the meaning of the expression subject to provisions of Section 11AC of the Act used in the above rule. Such expression can only mean that where provisions of Section 11AC are applicable those provisions will apply and not the provisions of Rule 25. This e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng issue as to what is the stage at which goods have to be entered in the register envisaged in Rule 10 commonly called as RG-1. Quite often the argument comes up that the goods in question were not fully finished. Mostly the argument is accepted. But that can be only in situations where the goods are otherwise accounted for by the party, that is the presence of the goods is evident from entries in other registers and non-accounting is either due to a simple error or due to difference in understanding as to when the goods becomes finished goods. But if the presence of the goods is not entered in any records maintained in the usual course of business, the goods are clearly liable to confiscation under Rule 25(b). That is the reason why the expression with intent to evade payment of duty is not included in this clause. So cases where the goods are not entered in registers are to be judicially examined to see whether the omission to enter it in one of the registers is explainable. In this case no explanations justifying the reason for not entering the goods in the books of account is given. Further the appellant was almost about to cross the limit of clearance of fully exempted go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 186 (P H). 20. From the above decisions of the High Courts as also the decision of the Tribunal in the case of Majestic Auto Ltd. v. CCE - 2004 (172) E.L.T. 391 (Tri.) relied upon by Revenue listed in para 7 above it is clear that the question whether there was intention to evade payment of duty and the question whether the excess goods are satisfactorily accounted for are matters to be decided based on facts of each case and based on any rule made by the Tribunal. 21. In the case of unaccounted goods seized the adjudicating authority has not imposed any penalty under Section 11AC. So I limit my examination of the issue to the question whether penalty provisions of Rule 25 will apply in the facts of the case. I am of the view that the respondents were liable to pay duty on the goods considering the quantum of goods already cleared in the financial year. When at such stage the goods are not recorded in account books and are found in the premises of the factory, the presence of the goods is not satisfactorily accounted for. So the goods are liable to confiscation under Rule 25 and the respondent is liable to pay penalty under Rule 25. So I uphold the confiscation of goods fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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