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TMI Blog2007 (5) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28th March, 2003 (Annexure P/11), so also order, Annexure P/l3 dated 29th April, 2004 dismissing a application for review by the Customs, Excise Service Tax Appellate Tribunal, New Delhi, petitioner has filed this petition. 2. Petitioner No. 1 is a public limited company incorporated and registered under the Companies Act, 1956 having its registered office at 612, Raheja Chambers, Nariman Point, Fort, Mumbai and a industrial unit in Malanpur, district Bhind. In the unit at Malanpur, petitioners manufacture various types of rigid PVC Films. The items manufactured by the petitioner/company are liable to duty for central excise under sub-heading 39.20 of the First Schedule to the Central Excise Tariff Act, 1985. 3. According to the manufacturing process, petitioner's contend that they have already informed the authorities concerned the procedure and the process followed and have intimated them that the finished product after quality control test when ready for despatch to the customers is entered in the RG-1 register. It is the case of the petitioners that ever since the beginning it is only after the quality control test on the finished product is concluded that the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... why fine of Rs. 2.00 lacs in lieu confiscation of the goods and further penalty of Rs. 50,000/- be not imposed. Petitioners again appeared and submitted their reply and reiterated their earlier stand. However, rejecting the contentions raised, the Deputy Commissioner by the impugned order dated 9th February, 2000 imposed fine of Rs. 2.00 lacs in lieu of confiscation and further penalty of Rs. 50,000/-. Appeals filed before the Commissioner (Appeals), Bhopal and the Appellate Authority and the Appellate Tribunal met with the same fate, petitioners are before this Court assailing, the orders passed. 5. Shri Patil learned counsel for the representing the petitioners submitted that in the instant case, the stage for accounting RG-I stock would arise only when the goods were ready to be despatched to the packing section and from there to the customers and as the goods in question the sticker 'hold' was affix it was never intended to be accounted as finished goods until and unless cleared by the quality control department. It was emphasised by him that there being no intention to defraud the revenue and there being no intention to evade payment of duty, authorities have committed gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of the respondents. 7. I have heard learned counsel for the parties at length and perused the record. 8. From the records, it is seen that on 13th July, 1999 when the goods were detained admittedly the goods in question which were detained were not entered in the RG-I stock account. The reason given by the petitioners was that the goods were kept on "hold" as the same were not subjected to quality control test and approved by the quality control department for sale to the customers. According to the petitioners, it is only after the quality control test if it is found fit then the goods becomes fully manufactured finished goods ready to be transported for delivery to the customers and it is at this stage that entries are made in the RG-I stock register. This has been the consistent stand of the petitioners through out. During the course of hearing, Shri Patil, learned counsel for the petitioners has invited my attention to certain circulars and trade notices issued by the department. One such notice issued by the Chandigarh Collectorate being Trade Notice No. 9 dated 14th March, 1995 pertains to fixing of RG-I stage for BOPP Films. In this notice, it is indicated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, penal provision should not be enforced. It has been held by the High Court that penal provisions have to be construed strictly and intention to evade payment of duty should be established before imposing penalty and proceeding to confiscate the goods. In most of the judgments passed by the Tribunal relied upon by Shri' Patil, similar principles are laid down. In the case of Bhillai Conductors (P) Ltd ., v. C.C.E., Raipur, 2000 (125) E.L.T. 781 (Tribunal), it has been held by the Tribunal that mere non-accounting of the goods in the RG-I register without there being any material to show that there was intention to evade duty, imposition of penalty and enforcing the penal clause is not proper. The views expressed by the Tribunal in the case of Bhillai Conductors (P) Ltd., (supra) is followed in various other cases. 9. In the cases relied upon by Shri Sharma, learned counsel for the respondents, the factual aspects are some what different. In the case of Natco Pharma Ltd. v. Commissioner of Central Excise, Hyderabad, 2001 (136) E.L.T. 282, the goods were found without entry in the RG-I register after all the tests were conducted and it was in fully packed condition ready fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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