TaxTMI 
TaxTMI 
2021 (7) TMI 97
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....esses and Sh. Pukhraj Acharya, employee of the appellant, some incriminating documents/ records were recovered and resumed from the factory under panchnama dated 24.05.2013. During search, statutory records being Form-IV and RG-I registers were not found. Physical stock verification of the finished goods and raw materials was also conducted. Sh. Pukhraj Acharya was asked to produce authorised documents relating to stock found during physical verification but he could not produce the same. As neither any document relating to production or stock of finished goods (RG-I) and of raw material (Form-IV) were found during the physical stock verification, nor were the same produced on being called for. The finished goods, i.e. cigarettes of different brands, totally valued at Rs. 37,23,000/- were seized under Section 110 of the Customs Act, 1962 as made applicable to the Central Excise matters vide Section 12 of the Central Excise Act, 1944. The raw materials were also detained. A panchnama dated 24.05.2013 was drawn on the spot. The seized and detained goods were handed over on 'Supurdginama' dated 24.05.2013 to Sh. Pukhraj Acharya, employee of the appellant for safe custody. 2.2 The Pro....
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....r factory premise and had gone to Ganganagar in a marriage of relative on 24.05.2013; that on being informed that officers had visited, they immediately came back and reached the factory premises, but till then the officers conducting search had concluded the proceedings and left the premises and RG-I and Form-IV registers were not found; that they were told that the officers had also not found the same. He further stated that on not finding the old RG-I and Form-IV, new registers have been started by them which have been confirmed by the Range Officer. On being asked as to how they got photocopy of the RG-I and form-IV registers, as submitted by them vide their letter dated 03.10.2013, he stated that on 20.05.2013, the Audit wing of Jaipur-II Commissionerate had visited their factory for audit and at that time they got two sets of photocopy, one copy remained with the officers and one copy of the same was kept by them. As the photocopy of RG-I register also has entries of 21.05.2013 to 23.05.2013, he was asked to clarify the same. He stated that the photocopy of RG-I register submitted bear entry upto 23.05.2013, wherein the entries for 21, 22 and 23.05.2013 were made later on by ....
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....ly MIDLAND and TUFF-10 brands of cigarettes was @ 12,000/CFC and packing of HARBOUR and '50-50' brands was 10,000/CFC and 16,000/CFC, respectively. The appellant also provided copies of few bills in support of their claim. 2.9 In order to verify the above submissions of the appellant, officers of DGCEI visited factory premises on 29.10.2013 and checked the seized/ detained goods alongwith the packing dates mentioned on the finished goods (cigarettes) seized under panchnama dated 24.05.2013. During verification, it was found that the packing of '50-50' brand of cigarettes was in 1 CFC =16,000 cigarettes and HARBOUR brand was in 1 CFC =10,000 cigarettes. Further, the date of packing of HARBOUR brand was printed as 7/10. 2.10 As the appellant has claimed that the Audit wing of the Central Excise Commissionerate, Jaipur-II had taken photocopies of the RG-I and Form-IV at the time of audit of their firm, the Deputy Commissioner (Audit), Central Excise Commissionerate, Jaipur-II was requested to provide the said copies. In reply the Deputy Commissioner (Audit), Central Excise Jaipur-II vide his letter C. No. 246/IAR/Gr. IX/JP-IJ/12-13/1194 dated 20.11.2013 has informed that the Audit g....
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....consisted of stock only for the month of April and May, 2013. It also contains a remark dated 20.03.2013 of the Supdt. (Audit) "conducted audit for the period July, 2010 to March, 2013". Further, as per report from the Audit Wing they had not obtained any photocopies of RG-I register at the time of audit. Thus, the disappearance of RG-I register as well as the Form-IV register appears suspicious and by way of evil design of the appellant to evade duty. Further, the version of the appellant that they had prepared two photocopy of RG-I register on 20.05.2013 and delivered one copy to the Audit Section of the Department and one copy kept with them, appear dubious and not believable. Further, the Xerox copy of RG-I register produced only reflected production data, no data of clearance during the month of May, 2013. This abnormality has also makes the photocopy so produced, unreliable. 5. Copy of monthly return (ER-I), of the appellant was also resumed during search. But in absence of RG-I register the closing stock could not be verified, if the same has been lying in stock. Thus, there was a strong possibility in view of the huge stock of finished goods and raw material found, that th....
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....Further, the contention of the appellant that they have lost or misplaced, both registers, was also found to be unbelievable. There being no cogent reasons for missing of these statutory registers. Thus, the stock of finished goods and raw materials seized during inspection on 24.05.2013, appeared to be in violation of the provision of Central Excise Act read with Rules, and thus liable to confiscation under Rule 25(1)(b). Accordingly, show cause notice dated 22.11.2013 was issued with proposal to confiscate the unexplained finished goods and raw material, with further proposal to impose penalty, by the Additional Director, DGCEI, New Delhi. 8. The show cause notice was adjudicated on contest and the proposed confiscation of finished goods was confirmed, amounting to Rs. 34,60,200/- with option for redemption on payment of fine of Rs. 8,65,050/-. Further, the raw material as per Annexure-III to panchnama valued at Rs. 9,76,400/- was also confiscated with option to redeem on fine equal to 25% of their value i.e. 2,44,100/-. Further penalty of Rs. 20,00,000/- was also imposed under Rule 25 on the appellant. 9. Being aggrieved, the appellant preferred appeal before the Commissioner ....
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.... photocopies of RG-I register was taken on 20.05.2013, so as to give to the audit and therefore, same was available with the appellant, and entries were made in the photocopy of RG-I register from 21.05.2013 to 24.05.2013. In any case, the stock as on 20.05.2013 as per photocopy of RG-I register bearing signature of audit, is not liable for confiscation, as the same is duly accounted for in the statutory register. iv) The Larger Bench of this Tribunal in the case of Bhillai Conductors Pvt. Ltd. -2000 (125) ELT 781 (Tri.LB) has held that confiscation is not attracted by mere non accountal of goods in RG-I register, when there is no evidence that such non-accountal of goods in factory was with intent to evade duty. The appeal filed against this has been dismissed by Hon'ble Chhattisgarh High Court reported as 2014 (307) ELT A81. Similar decision was taken in CCE vs. B.M.W. Steels Ltd. -2011 (272) ELT 315 (Tri.). v) Even otherwise also, Cigarettes are excisable items where the representative of the Excise Department has the physical control as per the Central Excise law. Thus, the Central Excise Officer is posted in the factory, so that no cigarettes can go outside, without his ap....
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....atutory register(s). Rather the Audit team has made an endorsement on the RG-I register, that they have audited the records for the period July, 2012 to March, 2013. 13. I further take notice that the factory of the appellant was under physical supervision of the Officers of Central Excise Department. During the period of inspection Shri S. K. Lavasia, Superintendent and Shri Nathu Lal Jain, Inspector were posted at the factory of the appellant. As per Rule 6 of the Central Excise Rules, in case of cigarette the Superintendent or Inspector of Central Excise is required to assess the duty payable before removal by the assessee. Further, Rule 11 stipulates that no excisable goods shall be removed from the factory or a warehouse except under an invoice signed by the owner of the factory or his authorised agent and in case of cigarette, each such invoice shall be countersigned by the Inspector or Superintendent of Central Excise before the cigarettes are removed from the factory. I find that there is no allegation on the appellant of having removed any finished goods clandestinely without informing the Superintendent / Inspector. The arrangement of posting of Central Excise Officers r....