CCE Vs. KITPLY IND. LTD.

JUDGEMENT

(1.) THIS appeal of the Revenue is against the order of the Commissioner of Central Excise (Appeals) setting aside the order of the original authority confiscating the seized excisable goods (with option for redemption on payment of fine) and imposing penalty on the party.

(2.) The respondents were engaged in the manufacture of plywood and allied products. Officers of Central Excise visited their factory on 22.12.98 and conducted search of the premises, wherein documents were seized under a Panchnama in the presence of witnesses. On 23.12.98, the officers conducted physical stock verification in the factory and found an excess stock of 8175.05 sq.mtrs. of plywood of different brands valued at over Rs. 19 Lakhs and involving central excise duty to the tune of Rs. 3,57,922.53. A statement of Dy. Manager (Production) of the Company was recorded on 23.12.98. The goods found in excess were seized but released to the party on execution of bond. A show -cause notice dated 2.6.99 was issued by the department to the respondents for confiscating the seized goods and imposing penalty on the party. The party denied the allegations contained in the show -cause notice. The adjudicating authority ordered confiscation of the seized goods with option for redemption thereof on payment of a fine of Rs. 4,98,000. The authority appropriated the redemption fine from the bank guarantee furnished by the party against the provisional release of the goods. The original authority also imposed a penalty of Rs. 3.5 Lakhs on the party under Rules 173Q and 226 of the Central Excise Rules, 1944 for contravention of Rules 53, 173G and 226 of the said Rules. Aggrieved by the decision of the original authority, the party preferred appeal to the Commissioner (Appeals) and the latter disposed of the appeal setting aside confiscation and penalty under Rule 173Q but sustaining penalty to the extent of Rs. 2,000 under Rule 226. The Revenue in the present appeal is aggrieved by the decision of the Commissioner (Appeals).

(3.) HEARD both sides.