TaxTMI 
TaxTMI 
2003 (11) TMI 128
X X X X Extracts X X X X
X X X X Extracts X X X X
....bmitted that M/s. Blue Blends (India) Ltd., Appellants No. 1, manufacture Cotton Denim Fabrics; that the Central Excise Officers visited their factory premises on 20-9-1997 and effected seizure of 2,31,105 LMs of fabrics valued at Rs. 1,72,14,125/- on the ground that the same was fully manufactured and not entered in RG 1 Register; that the Officers also seized 12 invoices under the belief that the fabrics mentioned therein was cleared without payment of duty; that the Commissioner, under the impugned Order, has confirmed the demand of duty in respect of fabrics alleged to have been removed under the seized invoices, confiscated the seized goods with an option to redeem the same and imposed penalties on all the three Appellants. The learned....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egister, that they had followed this practice of accounting for the goods in RG 1 Register from the very inception of their factory. He contended that the said practice has the approval of the Department inasmuch as the loose RG 1 was duly authenticated by the Central Excise Officers; that the stock of the goods deposited in the bonded store room was found to tally with RG 1 Register; that as such it cannot be alleged by the Department that the seized goods were not accounted for as the same had been duly entered in the authenticated loose RG 1 Register. He relied upon the decision in the case of Pepsi Foods v. C.C.E., Chandigarh, 2002 (139) E.L.T. 658 (T) wherein it has been held by the Tribunal that when the assessee has its own detailed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that in any case the redemption fine of Rs. 20 lakh is on very high side which, in the circumstances of the cases, may be reduced considerably; that no penalty is also imposable and in any case the penalty imposed is on very higher side; that the penalties are not imposable on Shri Ajit Sampatrai Ranka, Factory Manager and Rajendra Vadilal Shah, Vice President (Technical) as no particular role having been played by them in the commission and the alleged offence has been disclosed either in the show cause notices or has been established in the impugned order; that no material whatsoever, has been disclosed that they have any knowledge of the goods being liable to confiscation; that, therefore penalty under Rule 209A of the Central Excise Ru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....im fabrics, which was seized, being not accounted in the statutory RG 1 Register, learned SDR submitted that, admittedly, the fully manufactured fabrics was found outside the store room, which had not been entered in the statutory record; that Sh. Ranka had admitted in his statement that denim fabrics, duly processed and packed in HDPE bags and tied with the plastic strips, was ready for despatch and was in marketable condition; that law does not permit for maintenance of two sets of RG 1 Registers; that the goods, lying in the finished room, are required to be entered in RG 1 meant for approved store room; that Sh. Ranka had admitted in his statement dated 20-9-1997, that the seized goods did not require any further processing and were ful....
X X X X Extracts X X X X
X X X X Extracts X X X X
....O.I., 1988 (34) E.L.T. 30 (Bom.); that "Clauses (a), (b) and (c) of sub-rule (1) or Rule 173Q do not admittedly use the expression "with intent to evade payment of duty", which is found in Clause (d) thereof. It can, therefore, be prima facie assumed that the liability in terms of Rule 173Q(1), Clauses (a), (b) and (c), does not depend upon mens rea". Further, the Supreme Court in the case of Zunjarrao Bhikaji Nagarkar v. Union of India, 1999 (112) E.L.T. 772 (S.C.) has held, while interpreting Rule 173Q, that "both things are necessary; (i) goods are liable to confiscation; and (ii) the person concerned is liable to penalty. Accordingly, we hold that the goods, which were in fully finished conditions and were found unaccounted for in statu....