Court upholds redemption fine & penalty for unaccounted goods found in factory.

The court upheld the confirmation of a redemption fine and penalty of Rs. 2.75 lakh each imposed on the appellant for unaccounted goods found during a search at the factory premises. The appellant's argument that the goods were received from a job worker and were awaiting inspection before entry in the register was dismissed. The judge found that the finished goods were present in the factory without proper entry in the register, supporting the imposition of the redemption fine and penalty. The appeal was therefore dismissed, affirming the decision of the adjudicating authority and the Commissioner (Appeals).

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Issues:
Confirmation of redemption fine and penalty for unaccounted goods found during search.

Analysis:
The appellant appealed against the confirmation of a redemption fine and penalty of Rs. 2.75 lakh each. The case involved a search at the factory premises where goods worth Rs. 19,23,810 were found in excess compared to recorded stock. The production in charge and excise clerk failed to provide a reasonable explanation for the unaccounted finished goods, leading to their seizure. Additionally, some finished goods were found at the back of the factory, explained as rejected items for replacement, yet unaccounted for in statutory records. A show cause notice was issued for contraventions of Central Excise Rules, resulting in the imposition of redemption fine and penalty by the adjudicating authority. The Commissioner (Appeals) upheld this decision, prompting the appellant's appeal.

The appellant argued that the unaccounted goods were received from a job worker and were to undergo inspection before entry in the RG-1 register. It was contended that there was no intention to evade recording these goods, hence the redemption fine and penalty should not apply. Conversely, the AR highlighted that the goods were in a ready-to-clear packed condition, undermining the appellant's argument.

After hearing both parties, the judge found that the charge against the appellant was valid as the finished goods were present in the factory without proper entry in the RG-1 register. Consequently, the plea made by the appellant's counsel was deemed contrary to the case facts. Thus, the impugned order was upheld, dismissing the appellant's appeal.

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