PRATIK PANELS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) M/s. Pratik Panels Ltd. have filed the present appeal being aggrieved with the Order No. 263/2001, dated 23 -8 -2001 under which the Commissioner, Central Excise has confirmed the demand of Central Excise duty amounting to Rs. 84,466/ -, imposed a penalty of Rs. 1 lakh under Rule 173Q and Rule 226 of the Central Excise Rules, 1944 besides imposing penalty of Rs. 4,466 under Section 11AC of the Central Excise Act read with Rule 57 -I(4) and confiscated the finished final products and raw materials found in excess with an option to them to redeem the same on payment of fine of Rs. 5 lakhs.

(2.) Shri Ravi Raghvan, learned Consultant, submitted that the appellants manufacture Veneers (decorative and face Veneers), Commercial and Decorative Plywood, Black Boards, Inlay Veneer Strips, Veneer Fibre Board and Wooden Edge Lipping Patti of various sizes, thickness and quality; that Central Excise Officers, on 11 -2 -99 ascertained the stock position in the factory and in godown opposite factory premises and seized finished goods worth Rs. 15,14,423 and raw material valued at Rs. 5,78,755 found in excess in the factory premises; that the officers also seized the finished goods and raw materials kept in outside godown; the officers also noticed shortage of decorative veneer and raw material; that subsequently the matter has been adjudicated by the Commissioner under the impugned Order demanding duty on the finished products and raw material found short and confiscating the goods found in excess. The learned Advocate, further, submitted that the appellants had undertaken the major construction work of factory coupled with installation of big machinery, which occupied considerable space in their factory premises resulting in acute shortage of place; that under these circumstances, they were compelled to transfer some of their finished goods and raw materials to temporary godown situated opposite their factory premises and the said transfer was done under the belief that the same also constituted part of the licensed premises of the factory; that under the said belief they did not give any intimation to the Department about the transfer of goods.

(3.) As regards the excess finished goods, the learned Consultant explained that it is the practice in their industry, that certain material which is of a discarded nature, which can neither be booked in good quality nor can be booked in scrap till the stage of its disposal has to remain as such in the factory and such quantity is booked periodically in RG -I; that, therefore, the same cannot be considered as excess stock in comparison to RG -I; that there was no excess of raw material as it is the practice in their unit that quantity of raw materials is subtracted from RG 23 - Part I only after ascertaining the actual quantity utilised in the manufactured goods and such debit entries are made periodically; that thus, factually, there was no excess stock in RG 23A Part -I Register. The learned Advocate also contended that as there was no intention to evade payment of duty on their part, the goods were not liable for confiscation; that there is no act on their part which remotely suggests that they have acted mala fidely with intention to avoid the payment of duty. He relied upon the decision in P.R. Auto Industries v. C.C.E., New Delhi, 2000 (122) E.L.T. 402 (T) and Pepsi Foods v. C.C.E., Chandigarh, 2002 (139) E.L.T. 658 (T) = 2001 (47) RLT 925 (CEGAT). Reliance has also been placed on the decision in C.C.E., Allahabad v. Pravesh Castings (P) Ltd., 2001 (136) E.L.T. 1185 (T) and CCE, Hyderabad v. Sunder Silk Mills P. Ltd., 2001 (137) E.L.T. 609 (T). Finally, the learned Advocate pleaded for reduction in redemption fine and penalty.