2011 (6) TMI 388 - AT - Central Excise

Commissioner reverses confiscation order for unregistered Ceramic Glazed Tiles, upholds penalties.

COMMISSIONER OF CENTRAL EXCISE, RAJKOT Versus FOTON CERAMICS

COMMISSIONER OF CENTRAL EXCISE, RAJKOT Versus FOTON CERAMICS - 2011 (272) E.L.T. 388 (Tri. - Ahmd.) Issues:1. Confiscation of excess Ceramic Glazed Tiles found during inspection.2. Imposition of penalties on the manufacturing unit and the partner.3. Adjudication of the appeal against the order of confiscation and penalties.Confiscation of Excess Goods:The case involved the confiscation of 4,131 boxes of Ceramic Glazed Tiles found in excess during an inspection at the factory. The Commissioner(Appeals) set aside the confiscation order, noting that the excess stock was due to non-entry in the RG-1 register and not removal without duty payment. The judgment emphasized the absence of evidence of malafide intent or duty evasion, leading to the conclusion that confiscation was not justified. However, a penalty of Rs.10,000 was upheld for non-maintenance of the Daily Stock Register, as proper accounting was not done.Imposition of Penalties:Penalties of Rs.10,000 each were imposed on the manufacturing unit and a partner for non-maintenance of the RG-1 register. The Commissioner(Appeals) set aside the penalty on the partner, considering the lack of confiscation. The judgment highlighted that penalties can be imposed for non-maintenance of accounts, as per legal precedents. However, in the absence of malafide intent or evasion, confiscation solely due to non-accountal in the register was deemed unsustainable.Adjudication of Appeal:The judgment analyzed the factual position where excess production was reported on the day of inspection but not immediately entered into the records. It differentiated cases of prolonged non-maintenance of records from the present scenario, where the register was up to date. Emphasizing the absence of evidence for clandestine removal or raw material discrepancies, the judgment concluded that confiscation and penalties were unwarranted. The imposition of a penalty of Rs.10,000 was deemed unjustified. The penalty on the partner was rightfully set aside due to the lack of confiscation.In conclusion, the appeal by the Revenue was rejected, and the respondent's cross objection was disposed of in light of the detailed analysis of the confiscation, penalties, and factual circumstances surrounding the case.