ATUL ALUMINIUM INDUSTRIES Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THIS appeal has been filed by the appellants against the impugned order -in -appeal dated 2 -7 -2002 vide which the Commissioner (Appeals) has modified the order -in -original only in respect of penalty, but upheld the same regarding confiscation of the goods, duty and penalty on the appellants.

(2.) ON 25 -2 -92, the Central Excise officers visited the factory premises of the appellants and found that the goods were being loaded by the appellants in a tempo parked in front of the gate of the factory. On enquiry, Shri Deepak Kumar, representative of the appellants who was supervising the loading at that time, revealed that the loaded goods were PVC compound. But no GP -I at that time in respect of those goods was prepared. Thereafter, physical stock verification was carried out and 8,780 kgs of PVC compound (including 3,600 kgs loaded in the tempo) valued at Rs. 3,08,160/ - involving excise duty of Rs. 86,011.20, was found in excess of the recorded stock. Besides this, 14,335.6 kgs of PVC resin and 2,068.735 kgs DOP, LS involving duty of Rs. 1,76,796.22 were also found short of the recorded stock. Consequently, show cause notice was served on the appellants for payment of duty on the short stock with penalty. The confiscation of the goods found in excess were also proposed in that notice. The notice was also issued to the owner of the tempo for confiscation. The appellants controverted the allegations of the show cause notice and averred that the tempo loaded with the goods was still standing at the gate of the factory and as such, there was no removal of the goods by them. Regarding the shortage of the inputs, they averred that the same were utilised in the manufacture of the finished goods which were found in excess and other semi -finished goods, lying in the factory. The excess goods found in the factory, did not reach the stage of finished goods as testing as per ISI was appellants and ordered confiscation of excess goods, confirmed the demand for the goods found short and imposed penalties and fixed redemption fine for redemption of the goods as detailed in the order -in -original. That order had been affirmed by the Commissioner (Appeals) except for modification in the penalty.

(3.) I have heard both sides and gone through the record. The perusal of the record shows that the total goods found in excess of the recorded stock were 8,780 kgs of PVC compound. This figure included 3,600 kgs of goods found loaded in the tempo parked at the factory gate of the appellants. Regarding the goods lying in the factory, the appellants had from the very beginning maintained that those goods had not attained the finished stage as testing as per ISI was required to be carried out in respect thereof. The entry in the relevant record was to be made only after the testing as without ISI testing, the goods could not be marketed. This stand of the appellants had not been controverted by the authorities below. Therefore, the same could not be ignored while ordering the confiscation of the goods and imposing redemption fine. The entry was to be made by the appellants only when the goods had attained the finished stage after the testing as per ISI and as such, the same could not be legally confiscated.