2005 (3) TMI 527 - AT - Central Excise

Tribunal grants appeal, rules excisable goods must be accounted for daily, setting aside oppressive confiscation order.

The Tribunal set aside the order confiscating goods for not being entered in statutory records, ruling that excisable goods must be accounted for 'daily' ... Accountal of goods - Confiscation and penalty Issues: Seizure of goods for not being entered in statutory records, Confiscation with option to redeem, Interpretation of Rule requiring daily entry of production.Seizure of goods for not being entered in statutory records:The Central Excise Officers visited the appellant's premises and seized goods valued at about Rs. 5 lakhs as they were not entered in the statutory records of production (RG-I). The appellant explained that the goods were not fully manufactured and ready for storage or sale at the time of the visit, but this explanation was not accepted by the lower authorities. The Commissioner held that excisable goods, even if not packed, are liable for excise duty and must be entered in stock records. However, the Tribunal found the findings incorrect, stating that the Rule requiring daily entry of production should be construed practically. It was clarified that production should be accounted for 'daily,' meaning one entry for the day's production at the end of the day, not multiple entries for the same day. As the visit was at 2.30 p.m. and production was ongoing, no entry could have been made before the day's shift was over.Confiscation with option to redeem:Based on the finding that the goods were liable for confiscation due to not being entered in the statutory records, they were confiscated with an option to redeem on payment of fine and penalty. However, the Tribunal set aside this order, stating that the requirement of the Rule was being interpreted impractically and oppressively. The appeal was allowed, and the impugned order was set aside, providing consequential relief to the appellants.Interpretation of Rule requiring daily entry of production:The Tribunal clarified that the Rule requiring daily entry of production should be understood practically. It was explained that the production should be accounted for 'daily,' meaning one entry for the day's production at the end of the day, not multiple entries for the same day. In this case, as the visit occurred at 2.30 p.m. while production was ongoing, it was not feasible to make an entry before the day's shift was over. The Tribunal emphasized that the Rule should not be construed in an impractical and oppressive manner, and accordingly set aside the impugned order, allowing the appeal with any consequential relief for the appellants.