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TMI Blog2013 (9) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... ranule, found weighing 1289 kgs. The said excess stock were initially detained and later seized. On completion of investigation, a show- cause notice was issued to them proposing confiscation of the seized excisable goods & imposition of penalty under Rule 25 of the Central Excise Rules, 2002 on the Appellant No. 1 and personal penalty on Director Mr. Kamalesh Ladha, Appellant No. 2, under Rule 26 of the Central Excise Rules, 2002. The Adjudicating Authority ordered confiscation of the seized goods valued at Rs. 3,78,602/- under Rule 25 of the Central Excise Rules, 2002 with an option to redeem the same on payment of redemption fine of Rs. 1,00,000/-; he has also imposed a penalty of Rs. 62,394/- on the Appellant No. 1 under Rule 25 of the Central Excise Rules, 2002 and personal penalty of Rs. 62,394/- on the Director Mr. Kamalesh Ladha, under Rule 26 of the said Rules. Aggrieved, the appellants filed Appeals before the ld. Commissioner (Appeals). The ld. Commissioner (Appeals) upheld the order of the adjudicating authority and disallowed both the appeals filed by the appellants. Hence, the present appeals. 3. The ld. Advocate appearing for the appellants submitted that the excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock of raw materials and finished goods, respectively, were noticed. The statement of Mr. Kamalesh Ladha, Director of the Appellant Company, was recorded, wherein he had admitted to the said shortages of finished goods and also excess stock of raw materials. Explaining the reasons for such discrepancies, Mr. Ladha had stated that due to market compulsion, they had undertaken some unaccounted manufacture and clearance of their finished goods and for the said purpose they had purchased some unaccounted raw materials from local market or other sources. The Director had admitted that the said raw materials were procured and stored with an intention to utilize the same in the manufacture of finished goods, meant to be cleared clandestinely. The ld. A.R. submitted that in view of these evidences, the excess raw materials stored and not accounted for in their records were liable to confiscation under Rule 25(1)(b) of Central Excise Rules, 2002. He has submitted that the statement furnished by the Director of the Appellant, had not been retracted and since in the said statement, the excess and shortages were admitted, the Department need not prove the facts which were admitted. In suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yes, please state the reason behind the excess of those quantities as referred above? Ans. Yes, I clearly agree that some quantities as detailed in the instant stock verification report dated 30-1-2008 are found to be in excess in comparison to the stock register maintained by us and the bifurcation of the quantities of which I have stated in my foregoing answers. Regarding the reason behind the excess of raw materials as detailed in the instant of stock verification report dated 30-1-2008, I admit that due to market compulsion we undertook some unaccounted manufacture and clearance of our finished goods. Due to this, we had some unaccounted purchase of raw materials from local market or other source and for this the excess in physical stock in respect of those raw materials was detected." 6. It is also not in dispute that the said statement dated 12-7-2008 of the Director Mr. Kamlesh Ladha, had not been retracted by him at any point of time. The argument advanced by the ld. Advocate is that even if the Director of the Appellant Company had admitted to such excess stock of raw materials kept/stored in the factory premises meant to be used in or in relation to the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made applicable to excisable goods procured by him as raw materials to be used in the manufacture of finished excisable goods is, in my opinion, an incorrect interpretation of the said clause. The said Rule 25 is a penal provision and enumerates various situations and clause (b) of the sub-rule (1) is directed against non-accountal of excisable goods produced or manufactured or stored refers, inter alia, also to a manufacturer, who does not account for any excisable goods produced or manufactured or stored by him. The word 'or' in the said clause should be read disjunctively. The word 'excisable goods' defined at Sec. 2(d) of Central Excise Act, 1944 as was in force during the relevant period reads as : "excisable goods" means goods specified in [[the First Schedule and the Second Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986)] as being subject to a duty of excise and includes salt; Besides, the use of the word 'any' before the word excisable goods, in the said clause, makes it more clear and points out to a plausible interpretation that the said Rule is not only refers to the excisable goods manufactured and stored in the factory by a manufacturer but also excis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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