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of <h1>Tribunal overturns order seizing MDF boards worth Rs.32 crores, ruling unfinished goods not ready for entry.</h1> <h3>Nuchem Ltd. Versus CCE, Rohtak</h3> Nuchem Ltd. Versus CCE, Rohtak - TMI Issues:Confiscation of Medium Density Fibre Boards (MDF Boards) due to non-entry in RG-1 records, imposition of redemption fine and penalty under Rule 173Q of Central Excise Rules, 1944.Analysis:1. The appeal was filed against the Commissioner's order confiscating MDF Boards worth Rs.32 crores as they were not entered in the RG-1 records. The appellants were given the option to redeem the goods by paying a fine of Rs.8 crores along with a penalty of Rs.1.50 crores as per Rule 173Q of the Central Excise Rules, 1944.2. The appellants, engaged in manufacturing MDF boards, had a significant quantity lying outside their store room during a visit by DGCEI officers. Statements from company officials revealed that the goods were still in the production stage, awaiting finishing and grading by the quality control department before entry in the stock register.3. Further investigations showed that the goods had accumulated due to a halt in export activities, and the production department was yet to hand them over for quality control testing and finishing. The goods were not considered finished products until they passed the quality control tests and were sized according to market demand.4. Despite visual examination by officers indicating proper finishing of the goods, the production process involved sanding and cutting at an earlier stage, not after quality control. The goods were considered semi-finished, as reflected in the company's financial records and statements of company officials.5. The Revenue did not dispute the goods' age, manufactured over 3-4 years, and failed to prove any recent manufacturing for clandestine removal. Statements and evidence confirmed that the goods were not ready for entry in the RG-1 register, awaiting quality control tests and final processing.6. The Tribunal concluded that confiscation of the goods was unjustified, as the goods were still in a semi-finished state and not ripe for entry in the RG-1 register. The Commissioner's order was set aside, and the appeal was allowed with consequential relief, emphasizing the lack of justification for confiscation and penalties.This detailed analysis of the judgment highlights the key issues, evidence presented, legal arguments, and the Tribunal's decision, providing a comprehensive understanding of the case.
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