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of <h1>Tribunal reduces penalties, sets aside machinery confiscation order in goods confiscation appeal.</h1> The Tribunal partially allowed the appeal, confirming the confiscation of unaccounted goods but reducing the redemption fine and personal penalty. The ... Manufacture complete before testing of goods Issues Involved:1. Whether the goods found from the premises, including those hypothecated to the Bank, are fully manufactured goods.2. Whether the appellants have committed any default by not making any entry thereof in the RG-1 Register.3. Whether there was any manufacture and clandestine removal of the goods as alleged.4. Whether the department was justified in raising the demand in relation to the alleged clandestine removal.5. Whether the order of the adjudicating authority deserves to be sustained/set aside/modified.Summary:Issue 1: Fully Manufactured GoodsThe Tribunal examined whether the goods found on the premises, including those hypothecated to the Bank, were fully manufactured. The appellants contended that their products were subject to customer testing and approval before being considered 'manufactured' u/s 2(f) of the Central Excises and Salt Act, 1944. However, the Tribunal distinguished between goods manufactured to specific orders and those manufactured for general sale. It concluded that the goods in question were fully manufactured as soon as the manufacturing process was complete, irrespective of customer testing.Issue 2: Default in RG-1 Register EntryThe appellants argued that entries in the RG-1 register were made only after customer approval, a practice allegedly accepted by the Excise Department for 16 years. The Tribunal rejected this argument, stating that the manufacturing process was complete without the need for customer testing. The Tribunal held that the goods were fully manufactured and should have been entered in the RG-1 register.Issue 3: Manufacture and Clandestine RemovalThe department alleged clandestine removal based on discrepancies between the RG-1 register and the bank pledge register. The Tribunal found no independent evidence of clandestine removal and noted that goods could be repeatedly hypothecated to raise funds. The Tribunal concluded that the allegation of clandestine removal was not substantiated.Issue 4: Justification of DemandThe Tribunal found that the department's demand for duty based on alleged clandestine removal was not justified due to the lack of corroborative evidence.Issue 5: Order of Adjudicating AuthorityThe Tribunal confirmed the confiscation of the unaccounted goods but reduced the redemption fine from Rs. 3,00,000 to Rs. 50,000. The personal penalty was also reduced from Rs. 2,00,000 to Rs. 25,000. The order for confiscation of plant and machinery was set aside.Conclusion:The appeal was partly allowed. The Tribunal confirmed the confiscation of the unaccounted goods but reduced the redemption fine and personal penalty. The order for confiscation of plant and machinery was set aside.
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