9911796707
TMI Blog2014 (11) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... of paragraph 2A(g) of Notification No. 56/2002-C.E., dated 14-11-2002 read with Section 11A of the Central Excise Act, 1944 is upheld along with interest liability thereon under Section 11AB of the said Act. Central Excise duty demands in respect of Terpene and in respect of Menthol Crystals are upheld against M/s. Tien Yuan India (P) Ltd. under Section 11A of the Central Excise Act, 1944 along with interest thereon under Section 11AB and penalty of equivalent on the said firm under Section 11AC of the Central Excise Act, 1944 are upheld. Confiscation of goods valued at 95.08 lakhs (approx.) seized on 23-6-2006 at the premises of M/s. Tien Yuan India (P) Ltd., Taloja, under Rule 25 of the Central Excise Rules, 2002 along with option to redeem the same on payment of fine of 22 lakhs is upheld. The balance of demands towards duty, interest and penalties (other than those mentioned above) are set aside. X X X X Extracts X X X X X X X X Extracts X X X X ..... d., Jammu (in short, JDL, Jammu), M/s. Tien Yuan India Pvt. Ltd., Taloja (in short, TYIL, Taloja) and M/s. Jindal Drugs Ltd., Mumbai (in short, JDL, Mumbai) are three group companies having common Directors, namely S/Shri S.K. Jindal, Vijay Jindal and Ajay Jindal. (ii) JDL, Jammu was set up in April, 2005 as a new unit in the specified area of Jammu and Kashmir for the purpose of availing benefit of Notification No. 56/2002-C.E., dated 14-11-2002. It manufactures Deterpenated/De-fractionated Mentha Oil (DFMO) from Crude Mentha Oil (CMO) which is an agricultural product and is non-dutiable. The manufacture of DFMO involves deterpenation of CMO by fractional distillation process where terpene (which is dutiable) is generated as a by-product. It commenced its production w.e.f. 19-4-2005. The DFMO is cleared on payment of Central Excise duty to TYIL, Taloja and refund of duty paid is claimed in terms of para 2A(a) of the Notification No. 56/2002-C.E., dated 14-11-2002. (iii) TYIL, Taloja manufactures inter alia, Menthol & Menthol Crystals by using DFMO received from JDL, Jammu on which it avails Cenvat credit under Cenvat Credit Rules, 2004. TYIL clears Menthol and Mentho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol was found to be 76.5% to 88%, while in respect of remaining 233 consignments of DFMO, the percentage of L. Menthol was found to be below 76.46% as per the Protocol of Analysis reports prepared at TYIL, Taloja. The investigation was, therefore, of the view that the 233 consignments were not DFMO but actually CMO. (viii) After completion of investigation, proceedings were initiated by issue of a show cause notice dated 20-6-2007 seeking, inter alia, recovery of erroneous refund of ₹ 22,13,22,732/- from JDL, Jammu in terms of para 2A(g) of Notification No. 56/2002-C.E., read with Section 11A of the Central Excise Act, 1944. The notice also sought to recover interest under Section 11AB and impose penalty on it under Section 11AC of the Act. The notice also sought to recover Cenvat credit of ₹ 22,13,22,732/- from TYIL, Taloja on 233 consignments of CMO (2246.960 MTs) under Rule 14 of the Cenvat Credit Rules, 2004 read with 1st proviso to Section 11A(1) of the Central Excise Act, 1944. The notice also sought to recover interest under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 and to impose penalty on it under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Mentha Oil (DFMO), also called Deterpenated Mentha Oil. Whenever colourless DFMO is required, the yellow coloured DFMO obtained is taken to the second distillation column, wherein a temperature differential is maintained between the top and bottom of the distillation column. Heavy materials separate out as black pitch/residue in the bottom of the column. Separation of black pitch from the pale yellow coloured DFMO results in colourless DFMO which is called Water White DFMO. The DFMO manufactured at the Jammu Unit is sent to TYIL, Taloja where Menthol crystal is manufactured. The Menthol crystals so manufactured are exported by M/s. Jindal Drugs Ltd., Mumbai, a merchant exporter, under Rule 18 of the Central Excise Rules, 2002. (ii) The allegation of the Revenue is that out of 662 consignments of DFMO despatched by M/s. JDL, Jammu to M/s. TYIL, Taloja during the period April, 2005 to October, 2006, 233 consignments were not DFMO but were CMO. The premise for this allegation is that the L-Menthol percentage in 233 consignments was below 76.46% and as per the statement given by Shri Vijay Jindal, Director, the percentage of L-Menthol in DFMO would always be more than 76.46% a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on put to Shri Vijay Jindal was if the L-Menthol content of the starting material is 71.95% and terpene, 7.28%, what would be percentage of L-Menthol in DFMO. Considering these two figures as the composition of starting material, Shri Vijay Jindal answered that the percentage of L-Menthol in DFMO would be 76.46%. If the composition of the starting material is different, then a different result would ensue. Therefore, no reliance can be placed on the cut-off point of 76.46%. As per the analysis prepared at the Jammu plant, the percentage of L-Menthol and Terpene in CMO was found to vary from 71% to 75% and 4% to 8% respectively. In the consignment of DFMO cleared by the appellant, the percentage of terpene was found to be less than 1% in most of the cases, which itself proves that the appellant had removed terpene from the CMO and obtained DFMO. The statement of the employees in the Jammu Factory also shows that prior to 22-12-2005 deterpentation of CMO was undertaken at the Jammu Factory and the records maintained therein also showed that terpene was removed. Only during the period 26-12-2005 to 15-1-2006, the appellant had not undertaken deterpenation at Jammu. (v) As regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in process. Hence, the question of entering the details in the RG-1 Register does not arise. In view of the above position, the confiscation and consequent imposition of fine is unsustainable in law. In any case, the appellant had discharged the duty liability. In view of the above, it is prayed that the impugned order be set aside and the appeals allowed. 4. The learned Special Consultant appearing for the Revenue, on the other hand, made the following submissions : - 4.1 The case of the Revenue is based not only on the statements of various company officials and other independent persons, but also on the records seized during the investigation from the premises of both JDL, Jammu & TYIL, Taloja. These are briefly discussed herein below : A. Statements (a) In his statement dated 31-1-2006, Shri P.G. Patil, Quality Control Executive of TYIL, Taloja gave chemical composition of CMO & DFMO as below : CMO (a) Terpene : 4 - 9% (b) Menthone : 11 - 15% (c) Esters : 1 - 7% (d) L. Menthol : 70 - 75% DFMO (a) Terpene : below 1% (b) Menthone : 10 - 16% (c) Ester : 1 - 7% (d) L. Menthol : 76 - 85% Besides giving chemical composition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aloja and in the records it was shown as deterpenated mentha oil during the months of December, 2005 and January, 2006. He also stated that the plant was closed/out of production since last week of December, 2005. Regarding shortage of 22.860 MTs of Crude Mentha Oil and excess stock of about 7 M/Ts of Terpene found during stock verification on 7-3-2006, Shri Atul Mehare stated that shortage of Crude Mentha Oil might have occurred due to the fact that four trucks of material received from Head Office, Mumbai was actually Terpene and not CMO as declared. The excess quantity of Terpene might be due to the same reason. (e) In his statement dated 7-3-2006, Shri Shailendra S. Gadge, Shift-in-charge/Production Engineer in JDL, Jammu had, inter alia, stated that on 30-12-2005 and 31-12-2005, 4 trucks of material were received from the Head Office at Mumbai. That after unloading the material, samples were drawn & tested by him in the absence of Shri Ajit Keni, lab chemist and on test it was found that the material was Terpene and not crude mentha oil as shown in the invoice. That after 21-12-2005 till date, no production had taken place. When he was shown daily stock account of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess. B. Analytical Report vis-a-vis Protocol of Analysis reports : (i) JDL, Jammu prepares Analytical reports to ascertain the Terpene and L-Menthol contents in respect of each consignment of CMO. Similarly, TYIL, Taloja prepares reports of protocol of Analysis in respect of each consignment of DFMO to ascertain the chemical composition of various constituents including Terpene and L-Menthol. CMO being an agricultural produce, percentages of Terpene and L-Menthol in it are not uniform in all consignments. Terpene varies from 5 to 7% and L-Menthol varies from 71 to 75%. (ii) During the period 2005-2006, JDL, Jammu received 531 consignments of CMO. As per Analytical reports, average percentage of Terpene and L-Menthol were found to be 7.28% and 71.95% respectively. (iii) It is important to note that percentage of Terpene in DFMO is below 1%. During the investigation, the officers recovered 16 reports of Protocol of Analysis from the premises of TYIL, Taloja in respect of so-called DFMOs received from JDL, Jammu during the relevant period. Scrutiny of these reports of Protocol of Analysis showed that percentages of Terpene varied from 5% to 7%, meaning th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther independent persons, the following conclusions are inescapable : (i) That in some cases, JDL, Jammu was clearing CMO as such to TYIL, Taloja in the guise of DFMO on payment of duty and taking credit of the same in their account current in terms of para 2A(a) of the Notification No. 56/2002-C.E. (ii) That during the period 21-12-2005 to 17-1-2006 when the factory was closed and there was no manufacturing activity, yet JDL, Jammu had shown clearances of so-called DFMO by manipulating their internal records. These were actually CMO as confirmed by the statements of S/Shri Atul Mehare, Shailendra Gadge & Sehyog Singh. (iii) That in some cases TYIL, Taloja received CMO from JDL, Jammu under an invoice of DFMO and took irregular Cenvat credit which was utilized for payment of duty on Menthol Crystals. (iv) That no Terpene is generated in the course of manufacture of Menthol Crystals from DFMO. However, documentary evidences have clearly established that Terpene was generated at TYIL, Taloja in their integrated plant during the relevant period. In other words, they were using CMO in the manufacture of Menthol Crystals resulting in generation of Terpene. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this solution, which has a menthol content between 88% and 94%, is initially filtered to remove any foreign material that could be present in the purchased powder. It is then poured into a second galvanized steel container (60 to 80 kg. capacity), which is, in turn, placed upright in a second freezer." 4.3.1 Reading the above sub-para one may say that in CMO percentage of L-Menthol may be from 88% to 94%. But this does not help the appellants to say that after deterpenation of CMO, percentage of L-Menthol in DFMO would be less than 76.46%. 4.3.2 Ld. Sr. Counsel then referred to Indian Standards which reads as follows : "1 SCOPE This standard prescribes the requirements and the methods of sampling and test for the oil of Mentha arvensis, L, fam. Labiatae, whole and dementholized." Apart from the Scope, there are 7 other broad headings (titles) which are as below : 2. Normative References 3. Terminology 4. Types 5. Requirements 6. Packing and marking 7. Sampling 8. Test methods 4.3.3 From the title 'Normative References', ld. Sr. Counsel referred to Gas chromatographic analysis of perfumery materials [IS No. (Part 19) 1988]. From this he su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.E. Be that as it may, as per facts of this case, during the period April, 2005 to October, 2006 JDL, Jammu had deliberately cleared to TYIL, Taloja, 233 consignments of CMO in the guise of DFMO on payment of duty of more than ₹ 22 Crores and took credit of the same in their Account Current in contravention of the provision of Notification No. 56/2002-C.E. by wilful misstatement and suppression of facts. It is needless to say that CMO is not dutiable. Therefore, paying duty on it and taking credit by way of refund is highly irregular. This erroneous refund has, therefore, to be recovered under Section 11A read with para 2A(g) of the notification. Consequently, the appellants cannot escape from the liability to penalty under Section 11AC of the Act. H. Penalty on TYIL under Rule 15(2) of the Cenvat Credit Rules, 2004. 4.7 In so far as TYIL is concerned, it had suppressed the fact of receipt of CMO in the guise of DFMO only to avail undue Cenvat credit with the intention to evade payment of duty. Therefore, the Commissioner has rightly confirmed the duty demand under Rule 14 and imposed equal amount of penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rature available on the subject and the various statements recorded during investigation, it is seen that L-Menthol content in CMO varies between 70 to 75%. This is also corroborated by the statement of Shri Harish Kumar, Manager (Production) of M/s Ambica International that CMO consists of L-Menthol 70 - 75%, terpene 5 - 6% and Menthol 8 - 10% and in the DFMO, L-Menthol is 80 - 88%, terpene is below 1% and Menthol is 2 - 3%. From the evidences available on record, there is nothing which confirms with certainty that the L-Menthol content in DFMO should be 76.46% and above. In the absence of any such evidence, the claim of the Revenue in this regard cannot be sustained in law. Further, there is merit in the contention of the appellant that it is the terpene content which should be taken into account to see whether CMO has been deterpenated, since it is terpene which is being removed/separated from CMO. The test reports indicate that after deterpenation, the percentage of terpene had come down substantially which is indicative of the fact that the CMO has been subjected to deterpenation. Therefore, the duty demand on JDL, Jammu, except for the amount of ₹ 3,93,78,240/- is not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union Government has made Rules. For the purposes of this case, it is only necessary to quote r. 8, which is as follows : "Power to authorise exemption from duty in special cases : (1) The Central Government may from time to time, by notification in the Official Gazette, exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of the duty leviable on such goods, (2) The Central Board of Revenue may by special order in each case exempt from the payment of duty under circumstances of an exceptional nature, any excisable goods." In pursuance of the powers conferred on the Central Government by sub- r.(1) or r. 8, the notifications reformed to above were issued by the Central Government. By virtue of s. 38 of the Act, all rules made and notifications issued by the Central Government, as aforesaid are required to be published 'in the Official Gazette, and thereupon those rules and notifications "shall have effect as if enacted in this Act". Thus it is manifest that the notifications and the rule impugned in this case have been incorporated into the Act itself and have become part of the taxing statute.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice never dwell together. Fraud is a conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity thereon under Section 11AB of the said Act is also upheld. (ii) We also uphold the denial of Cenvat credit amounting to ₹ 3,93,78,240/- and order for its recovery from M/s. Tien Yuan India (P) Ltd., Taloja under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944. The interest liability thereon under the said rule read with Section 11AB is also upheld. (iii) Imposition of penalty on M/s. Jindal Drugs Ltd., Jammu, equal to ₹ 3,93,78,240/- under Section 11AC of the Central Excise Act, 1944, is upheld. (iv) Imposition of penalty on M/s. Tien Yuan India (P) Ltd., Taloja equal to ₹ 3,93,78,240/- under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944, is upheld. (v) Central Excise duty demands of ₹ 1,55,105/- (in respect of Terpene manufactured and cleared without payment of duty) and of ₹ 98,083/- (in respect of Menthol Crystals found short during the stock taking on 22-6-2006) are upheld against M/s. Tien Yuan India (P) Ltd., Taloja under Section 11A of the Central Excise Act, 1944 along with interest thereon under Section 11AB ibid. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort levy or non-levy of duty in certain cases. Thus the condition precedent is non-levy or short levy of duty, which is not the case herein. Further, the refund was granted to J.D.L., Jammu under Notification and not under Section 11B of the Act. The Notification provides mechanism, when excess credit is taken by the manufacturer, for its recovery. No proceeding under Section 11A is contemplated. In absence of the conditions precedent and circumstances under Section 11AC, I hold that no penalty is imposable, and the penalty imposed on the companies (JDL & TYIL) and its directors Shri S.K. Jindal & Shri Vijay Jindal are set aside. 7.4 In view of my aforementioned findings, holding Cenvat credit is available to TYIL, I set aside the penalty imposed on TYIL under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Act. I also set aside the penalty of ₹ 63,00,000/- imposed on TYIL under Rule 25 of CER. 7.5 That as regards confiscation order of molten menthol and eucalyptus oil in the premises of TYIL which was seized on 23-6-2006 vide panchanama under Rule 25 for contravention of Rule 10 of the CER, valued at ₹ 81,05,856/- and 14,03,000/- respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat Credit Rules, 2004 and therefore, the same is recoverable from them along with interest under the provisions of Rule 14 of the said Cenvat Credit Rules read with Sections 11A and 11AB of the Central Excise Act, 1944 as held by the Hon'ble Member (T) OR M/s. Tien Yuan India Pvt. Ltd. Taloja, are eligible for Cenvat credit of ₹ 3,93,78,240/- as held by the Hon'ble Member (Judicial) (ii) M/s. Jindal Drugs Ltd., Jammu, are liable to penalty of ₹ 3,93,78,240/- under Section 11AC of the Central Excise Act, 1944, as held by the Hon'ble Member (Technical) OR They are not liable to penalty under the said Section 11AC as held by the Hon'ble Member (Judicial) (iii) M/s. Tien Yuan India (P) Ltd., are liable to penalty amounting to ₹ 3,93,78,240/- under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 as held by the Hon'ble Member (Technical) OR M/s. Tien Yuan India (P) Ltd., are not liable to penalty under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Act as held by the Hon'ble Member (Judicial) (iv) Goods valued at ₹ 95.08 lakhs seized on 23-6-2006 at the premises of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f opinion on four issues has been referred to me. The four issues are discussed separately in paras below : 12. Heard both sides. 13. The ld. Sr. Advocate Shri V. Sridharan, mentioned that Crude Mentha Oil (CMO) is not an agricultural produce but excisable goods, resulting from manufacture, falling under sub-heading 3301 24 00, which covers "essential oils of Pepper Mint" having tariff rate of duty as 16%. He recalled that the amount of ₹ 3,93,78,240/- taken as credit/refund under Notification No. 56/2002 by Jindal Drugs Ltd. Jammu was paid back by them in cash along with interest. He contended that the department cannot deny Cenvat credit of this amount to TYIL under Rule 2(1) read with Rule 3(1)/Rule 4(1) of the Cenvat Credit Rules, because the credit was taken on the basis of invoices and Rule 3 only requires that duty should be paid on inputs. And even if what was received at TYIL was not DFMO but CMO, as confirmed in the adjudication order, the fact remains that the department has not disputed that CMO is an input for TYIL for manufacture of menthol crystals and also not disputed that the consignments were received by TYIL and used. He relied on Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit is availed irregularly by Jammu Unit, it shall be recoverable as if it is recovery of duty erroneously refunded. In the eventuality, there being no dispute that erroneous refund was taken by Jammu Unit, the credit would not be admissible to TYIL. It was his contention that the case of Nestle (supra) is not applicable because in that case the assessment had been finalized in the jurisdiction where duty had been paid on the goods and the Cenvat was taken in another jurisdiction. Having taken credit wrongly, the ld. Consultant said that, JDL, Jammu will be liable to penalty under Section 11AC for fraudulent availment of credit in violation of Notification 56/2002. 14.1 On the issue of penalty on TYIL, he drew attention to Rule 15(1) and 15(2) and emphasized the fact that credit taken on basis of invoices showing the goods as DFMO whereas actually they were CMO, clearly establishes that the Cenvat was taken wrongly without taking reasonable steps to ensure that appropriate duty had been paid on the inputs as indicated in the document accompanying the inputs. And penalty is imposable under Rule 15(2) because Cenvat credit was taken wrongly on account of fraud, collusion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said account current maintained by him. In case, the credit taken by the manufacturer is less than the amount of refund determined, the manufacturer shall be eligible to take credit of the balance amount. (g) the amount of the credit availed irregularly or availed of in excess of the amount determined correctly refundable under clause (e) and not reversed by the manufacturer within the period specified in that clause, shall be recoverable as if it is a recovery of duty of excise erroneously refunded. In case such irregular or excess credit is utilised for payment of excise duty on clearances of excisable goods, the said goods should be considered to have been cleared without payment of duty to the extent of utilisation of such irregular or excess credit". Clause (e) above lays down the procedure for determining the amount of credit available/refundable to the manufacturer and the process whereby the excess credit availed is to be reversed or the short credit taken is to be allowed back. It is very clearly stated that the Assistant Commissioner/Deputy Commissioner after verification, as may be deemed necessary, shall determine the amount correctly refundable to the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his, the credit of ₹ 3,93,78,240/- will be available to TYIL. 15.2 The ld. Sr. Advocate relied on the case of Nestle India Ltd. (supra). In this case the Hon'ble High Court of Bombay held that once the assessment has become final at suppliers end and duty is paid even if process does not amount to manufacture, the duty paid must be treated as valid and credit thereof at the recipient end must also be treated as valid. A similar view was held by the Principal Bench in the case of Commissioner of C. Ex., Meerut v. U.P. State Sugar Corporation Ltd. - 2013 (291) E.L.T. 402 (Tri.-Del.). And in the case of Cummins Diesel Sales India Ltd. v. Commissioner - 2014 TIOL 2046 CESTAT (Mumbai) = 2015 (315) E.L.T. 63 (Tri.-Mum.). Whether the facts of the present case are same as in these judgments may be seen. I note that in the present case also, the assessments by which the original duty was paid were finalized and not reopened till date. In case the department wanted to deny credit to TYIL it should have refunded the duty originally paid by JDL which was not done. Therefore in all fairness, for this reason also credit is not deniable to TYIL. 15.3 A view has been presented by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case the facts are that the amount of excess credit was paid back in cash before the determination of the excess credit availed. That the credit recovered is not for reason of erroneous refund finds support in the Apex Court judgment in the case of R.C. Tobacco (supra) in the context of Notification 32/99 which is pari materia to Notification No. 56/2002. The Hon'ble Supreme Court held that Section 11B is not applicable for excess refund granted under the said notification. It was held that…………… "36. There are two aspects to this dispute. The first is the question of limitation and the second the question of notice. As far as the first aspect is concerned, refund of duty under the Act has been provided for by Section 11B. The section specifies the manner and circumstances under which refunds of duty may be made. It is neither of the parties case that the refund made to the petitioners of the excise duty paid by them was under this section……….. 39. Although Section 11A does not refer to Section 11B, it speaks of duties "erroneously refunded". It cannot therefore refer to the refunds made to the petitioners u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty "………………". From a plain reading of this rule it is obvious that any goods which are not recorded in the RG.1 Register will be liable to confiscation. The case of Sheet Components (supra) relied upon by the ld. Sr. Advocate was based on different facts. In that case, the appellants had given prior intimation to the department that they would be keeping packed goods outside bonded store-room due to accumulation of stocks and were under the impression that only goods in bonded store-room were to recorded in RG.1. The case of Continental Chemicals (supra) is a Single Member judgment. On the other hand there is a catena of judgments holding that confiscation is imposable for non-accountal goods in RG-1. It was held so in Golbe Rexine - 2006 (203) E.L.T. 632 (Tri.-Chennai), CCE, Vapi v. Modison Ltd. - 2006 (203) E.L.T. 521 (Tri.-LB); CCE, Delhi v. Diamond Plywood Industries - 2003 (159) E.L.T. 854 (Tri.-Delhi). Thus there is no force in the appellant's contention. Therefore I find no fault with the order of confiscation and the redemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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