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TMI Blog2021 (7) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ea or any attempt by appellant to clandestinely clear the finished goods lying in the factory as on the date of inspection or at any point of time. This Tribunal have repeatedly held that any finished goods found not entered in the RG-I register on the date of inspection, are not liable for confiscation in absence of any finding of attempted clandestine removal of the excisable goods. Further, raw material which was found lying in the factory of the appellant was admittedly not manufactured by the appellant and as such the same is not dutiable in the hands of the appellant. Thus, there is no requirement of confiscation of raw material in the facts and circumstances - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE LUCKNOW VERSUS M/S. SHUBH METALS AND M/S. SHUBH METALS VERSUS COMMISSIONER OF CENTRAL EXCISE, LUCKNOW [ 2015 (1) TMI 1039 - CESTAT NEW DELHI] . A bare reading of Rule 25 read with Section 11AC of the Act, the order of confiscation and penalty can be made only in case of fraud, collusion, wilful mis-statement, suppression of facts or any contravention of the provisions of the law with intent to evade duty. There is no such allegation in the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant for safe custody. 2.2 The Proprietor of appellant was asked, vide summons dated 02.07.2013, 12.07.2013 and 05.08.2013 to provide (i) copy of statutory documents related to finished goods and raw materials seized/ detained at factory premises of the appellant under panchnama dated 24.05.2013 and (ii) to produce documentary evidence regarding ownership of warehouse situated at Basni Road, Nagaur and documents related to the tobacco found lying in the said warehouse, which was seized under panchnama dated 24.05.2013 by the officers of DGCEI. However, no reply was received from the appellant. 2.3 The Prop. of the appellant was again asked vide summons and letter dated 26.09.2013 to produce original RG-1 and Form-IV registers/ statutory documents related to finished goods and raw materials seized/ detained at factory premises of the appellant on 24.05.2013 and to appear to tender statement. In response, Sh. Vimal Kishore Agarwal, Authorised person of the appellant, appeared on 03.10.2013 to tender his statement. 2.4 Statement of Vimal Kishore Agarwal, authorised person of the appellant was recorded on 03.10.2013 under Section 14 of the Central Excise Act, 1944 where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for 21, 22 and 23.05.2013 were made later on by them. It is understood that these entries were made, as stated above, by pen on the xerox copy of RG-I register, which was kept by them after audit and they have submitted a photocopy of the said copy of RG-I register. However, on demand, they failed to produce the original of the said copy of the RG-I register. On being asked about suppliers of their raw materials and dealers of their finished goods, he stated that he will submit the said information after 2-4 days. He, however intimated that mainly they purchase biri patta tobacco, cigarette paper (CP), Filter paper (PCT), Filter Rod, Aluminium paper, Cell and slider (dibbi), Wrapper as raw materials and that their cigarettes are mainly sold to dealers such as M/s HARSHIN Enterprises, Tirur and M/s Daulat and Company, Nagaur. 2.6 He further stated that godown/ warehouse situated at RIICO Ind. Area, Basni Road, Nagaur, which was sealed during search on 24.05.2013, does not belong to them and the same belonged to one Sh. Praveen Kumar Pitti, Nagaur, who has General Store shop in Sadar Bazar. On being asked, whether they print packing date on the packing of the cigarettes, he stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -13/1194 dated 20.11.2013 has informed that the Audit group has neither obtained original nor photocopies of Form-IV and RG-I registers of the appellant, at the time of audit. 3. In view of the aforementioned facts it appeared to Revenue that- (a) Original RG-I and Form-IV registers were neither submitted by the appellant nor were the same found during search conducted at their factory premises on 24.05.2013. They were requested vide different summons and letters but they were unable to produce the same. (b) The appellant, however, have submitted photocopy of RG-I and Form-IV registers claiming that the same were done at the time of audit conducted by the Audit wing of Jaipur-II Commissionerate on 20.05.2013. But authenticity of the photocopies submitted by them has not been established. (c) The Deputy Commissioner (Audit), Central Excise Jaipur-II has also denied that the Audit wing had obtained any such copies at the time of the audit. (d) During recording of panchnama, 96,000 cigarettes of 50 50 brand (non-filtered) were seized. That the appellant has claimed that the officers calculated 12,000 cigarettes in 1 CFC whereas the packing of 50-50 brand was 16,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge stock of finished goods and raw material found, that the appellant have been indulging in clandestine manufacture and clearance. Thus, the stock of raw material and finished goods seized under panchnama dated 24.05.2014 seems to have been manufactured subsequent to the last return filed, and have been kept or stocked without recording in the statutory records, with intent to clear clandestinely evading the duty. It also appears in the circumstances that the appellant was manipulating and concocting statutory records of the stocks, i.e. RG-I, as per their convenience. 6. It further appeared from the Xerox copy of RG-I for April, 2013 that appellant was manufacturing much more quantity than they have cleared in the said month. The Proprietor of the appellant failed to appear before the Authority inspite of three summons. Further, they submitted Xerox copy of RG-I only on 03.10.2013 about five months after the date of search and requisition by Revenue, when the authorised person of the Prop. appeared for recording of statement. Thus, this late submission of the Xerox copy of RG-I also supports the strong suspicion of clandestine production and clearance by the appellant. No r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant. 9. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals) who agreed with the finding of the Additional Commissioner and was pleased to dismiss the appeal of the appellant company, but was pleased to allow the appeal of the Prop. as penalty cannot be imposed both on the Proprietorship firm and Proprietor. 10. Being aggrieved, the appellant is before this Tribunal on the following grounds:- i) The entire case of the Revenue is under Rule 25 of CER, 2002. Provisions of said Rule 25 can be invoked only subject to provisions of Section 11AC of the Central Excise Act, 1944, which has not been invoked in the notice. In the case of CCE vs. Shubh Metals -2015 (318) ELT 282 (Tri.) it has been held by the Hon ble Tribunal that Rule 25 is not invocable as Section 11AC has not been invoked and resultantly, confiscation and consequential penalty and fine were set aside. Similar decision has been given in the case of CCE vs. GAL Aluminium Extrusions Pvt. ltd. -2011 (274) ELT 582 (Tri.) ii) In the case of Camex Intermediates Ltd. vs. CCE -2008 (221) ELT 588 (Tri) it has been held that confiscation of raw materials, which was not found entered in regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Officer is posted in the factory, so that no cigarettes can go outside, without his approval. Therefore, unaccounted finished goods could not have gone without payment of duty. An identical case has been decided by the Tribunal in the case of CCE ST vs. Desire Tobacco Pvt. Ltd., whereby Revenue s appeal was dismissed vide Final Order No. 50387/2018 dated 25.01.2018. 11. Learned Authorised Representative for the Revenue relied on the impugned order. 12. Having considered the rival contentions, I find that only for not finding the statutory register being RG-I and Form-4 at the time of inspection by the Officers of DGCEI, adverse inference have been drawn without reference to the records of the appellant available with the Department, being the various returns filed from time to time and the inspection reports available on record. Admittedly, the audit has taken place in the factory premises of the appellant on 20.05.2013, which is four days before the date of search or inspection by the DGCEI. There is no adverse report on record by the Officers of the Audit team nor there is any whisper of any discrepancy in the stock of finished goods and raw material with respect to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... informing the Superintendent / Inspector. The arrangement of posting of Central Excise Officers round the clock was modified by the CBIC vide Circular No. 1055/4/2017-CX. dated 01.05.2017. The Board taking notice of limited number of officers posted in the Range and problem being faced in posting the Officers round the clock, and also by the cigarette manufacturing units, observed that in view of Rule 6 and 11 read together, the presence of Central Excise Officer is required for discharging the twin function of assessment of duty payable and countersigning the invoices before the cigarettes are removed from the factory. It was also observed that the view taken by some of the Officers in the Department that production in cigarette factory can take place only when the Central Excise officer is physically present is not correct. Further, observed that under the GST regime there is no such requirement of round the clock posting of Officers. It was thus clarified by the Board that round the clock posting is not mandatory but directory. Thus, evidently, round the clock posting of Officers in the cigarette factory have been modified only from 01.05.2017. Admittedly, at the time of inspec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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