APPOLLO ELECTRIC INDUSTRIES Vs. CCE, DELHI-I

JUDGEMENT

(1.) ON 10.2.97 the Central Excise of MOD -4,Delhi visited the factory premises of the appellants. On stock taking of the finished goods and the raw material in the factory,it was observed that there was an excess of 1,55,000 metrs of PUC insulated drop, wire which was finished product of the party,of the balance recorded in the RG I register.Out of this quantity,the party pleaded that they had manufactured 1,05,00 mtrs on 9.2.97 and 60,000 mtrs on 10.2.97 which were duly entered in RG I register of the party. However, the Central Excise authorities held the whole of the quantity of 1,55,000 mers of wire found present in the factory, was not recorded in the statutory account. Further, they also found the raw materials viz 1920 kys of PVC compound and 950 kgs of copper wire,on which the party had availed modvat credit but the same were found in excess as against the balance shown in their RG 23 part - II account. In fact this account showed nil balance so far as the inputs materials were concerned. Consequently the proceedings were initiated against them.On considering the defence of the party,the Assistant Commissioner,Central Excise MOD -IV,New Delhi ordered for the confiscation of the finished as well as input material found in excess,but gave the party an option to redeem the same on payment of fine of Rs. 80,000/ - and Rs. 70,000/ - respectively. He further imposed a penalty of Rs. 90,000/ - on the appellants and another penalty of Rs. 70,000/ - on Shri G.C.Ahuja, Partner of the party.

(2.) BOTH the aforesaid charged parties filed appels and the Commissioner(Appeals), New Delhi vide Order dated 10.9.2000 reduced the redemption fine in respect of PVC insulated drop wire to Rs.40,000/ - and in respect of the raw material to. 50,000/ - She further reduced the penalties on the company to Rs. 50,000/ - and on Shri G.C.Ahuja to Rs. 25,000/ -.

(3.) THE present appels are against the above order of Commissioner(Appeals)The matter is listed today for hearing the stay petition filed by them. I have heard Shri V.K.Gupta,Adv. for the appellants and Shri S.C.Pushkarna, JDR fors the respondents.Ld.Adv for the appellants contends that the final product was seized within the factory premises of the appellants and there is no allegation that the same under any circumstances was in the process o f being removed without payment of duty. it is,therefore,contended that the order for confiscation of the finished goods is not valid and consequently the penalty also cannot be imposed. The Ld. counsel for the appellants further contends that the appellant company is not in a very healthy financial position but this averment is not supported by any documentry evidence. With regard to the penalty on Shri G.C.Ahuja,it contended that in none of the order passed by lower authorities, there are any specific findings against him which would call for imposition of penalty.Ld. JDR for the respondents reitrates the findings arrived at by the lower authority. I have considered the submissions made before me.The issue relating to the confiscation and the imposition of redemption fine cannot be agitated under Section 35F of the Central Excise Act, 1944.Nevertheless it is not in dispute that the raw material in respect of which the modvat credit had been availed by the appellants,was held in excess of RG 23A part -I balance of the party. Therefore, there seem to be prima facie bonafide grounds for ordering the confiscation of the same. The appellant company has thus not mode out a case in its favour.However,there is force in the contention of the Ld. Adv.that there are no specific findings against Shri G.C.Ahuja,Partner on which a separate penalty has been imposed.Keeping in view all these facts, I direct the appellants M/s Appollo Electronic Industries to make a pre deposit of Rs. 25,000/ - on or before 16.4.2001. On making such deposit, balance of the amount of penalty imposed on them shall stand waived and its recovery stayed till the disposal of their appeal.The penalty imposed on Shri G.C. Ahuja,Partner is waived in full and its recovery stayed. The matter will be called for reporting compliance on 18.4.2000. Announced and dictated in the court.