NIRMAL ENTERPRISES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) FOUND finished goods in the appellants' factory in excess over the recorded balance in RG.l Register. Raw -materials were also found unaccounted, in the absence of any records having been maintained by the appellants in respect of raw -materials. Both the finished goods and raw -materials were seized. The adjudicating authority ordered confiscation of the finished goods and raw -materials with an option to redeem the same on payment of redemption fine of Rs. 20,000.00. That order also confirmed the demand of duty of Rs. 3,615/ - on the confiscated finished goods. In the appeal filed by the aggrieved party against the order of adjudication, the Commissioner (Appeals) set aside the aforesaid demand of duty on the finished goods and consequentially set aside the confiscation of the said goods and imposition of redemption fine in respect of such goods. However, the order of confiscation of the raw -materials was upheld by the lower appellate authority on the ground of non -accountal. The redemption fine in lieu of confiscation of the raw -materials was limited to Rs. 10,000.00 by the lower appellate authority. The said authority also upheld the penalty of Rs. 3,600.00 imposed on the appellants by the adjudicating authority. The present appeal before the Tribunal is against this order of the Commissioner (Appeals).

(2.) I have heard ld. Advocate Shri K.C. Sharma for the appellants and ld. JDR Dr. Ravinder Babu for the respondents. Ld. Counsel has reiterated the main ground of the appeal, which is to the effect that the raw -materials were actually duty -paid and had ceased to be 'excisable' and hence no provision of Rule 173Q was invocable in respect of the said goods. He submits, the penal provisions of Rule 173Q can be invoked for non -accountal of goods manufactured, produced or stored by a manufacturer only if such goods are 'excisable' i.e. goods in respect of which liability to pay Central Excise duty was yet to be discharged. In the instant case, the raw -materials were duty -paid and, therefore, they were not excisable goods for purposes of Clause (b) of Sub -rule 1 of Rule 173Q ibid. The order of confiscation of the raw -materials in question and, for that matter, imposition of redemption fine in lieu of confiscation are in vio lation of provisions of Clause (b) ibid. Ld. Advocate, therefore, prays for settirvj aside the imposition of redemption fine in respect of raw -materials and imposition of penalty on the appellants. Ld. JDR has opposed these arguments by submitting that the party had not contested the allegations in the showcause notice but pleaded for a lenient view while debiting the duty demanded. In view of acceptance of the Department's case by the appellants; ld. JDR submits, the grounds of appeal against the order of ld. Commissioner (Appeals) are not sustainable.

(3.) I have carefully examined the rival submissions along with the records of the case. I note that, in the show -cause notice, the Department had clearly alleged, inter alia, that the raw -materials were liable to confiscation under Rule 173Q of the Central Excise Rules, 1944. The party, apparently, failed to answer this allegation. They did not reply to the show -cause notice and also requested for a lenient view in the matter of deciding the case. They even waived personal hearing. This position is obvious from the record of the adjudication proceedings. In the absence of counter to the aforesaid allegation contained in the show -cause notice, I am unable to accept the present plea made by ld. Advocate that the raw -materials were duty -paid and hence not excisable to attract the provisions of Clause (b) ibid. As a result, the decision cited by ld. Advocate namely Devinder Sanitations v. CCE, Neiv Delhi [1996 (88) E.L.T. 589 (T)] becomes distinguishable. I, therefore, uphold the finding of the lower appellate authority that there was no justification for non -accountal of the rawmaterials. The order of the Commissioner (Appeals) upholding the confiscation of the raw -materials has to be sustained and I do accordingly. The redemption fine in lieu of confiscation of the raw -materials as adjudged by the lower appellate authority (Rs. 10,000.00) appears to be much on the higher side having regard to the facts and circumstances of the case, and I reduce the same to Rs. 5,000.00.