CCE Vs. ARORA IRON AND STEEL ROLLING MILLS

JUDGEMENT

(1.) In this appeal which has been filed by the Revenue against the impugned Order -in -Appeal, the issue relates to the applicability of the provisions of Rule 173 -Q to the goods found in excess in the factory premises of the respondents.

(2.) I have heard both sides and gone through the record. The perusal of the record shows that the respondents are engaged in the manufacture of steel re -rolled product, the excisable goods. On 12.2.2001, 33.745 MT of Steel Ingots was found lying excess in the factory premises than what was recorded in their statutory record. The adjudicating authority through the Order -in -Original ordered the confiscation of these excess goods and imposed redemption fine of Rs. 35,000 besides penalty of this much amount under Rule 173 -Q. The Commissioner (Appeals) has reversed that order by observing that these excess goods were not manufactured by the respondents, but were received by them from M/s Arora Alloys Ltd. who should have been served with a show cause notice and the present appellants could only be penalized under Rule 209 -A. But the view taken by the Commissioner (Appeals) cannot be legally sustained. The respondents are manufacturer of excisable goods and the goods found excess in their factory premises were also excisable. They had not been (sic) produced any document regarding the procurement of these goods from M/s Arora Alloys Ltd. They were required to even account for these goods in their record, even if they are not taken to be the manufacturer of the same. The plea of the respondents, as now put forth by the counsel, that these goods were the inputs for the manufacture of the final products, cannot be accepted as the Commissioner (Appeals) has not reversed the Order -in -Original on this ground. Moreover, even if these goods were their inputs, they were required to show the receipt of the same from M/s Arora Alloys Ltd. in their record. The bare reading of Rule 173 -Q as a whole makes it clear that a manufacturer of excisable goods is duty bound to maintain the record regarding all the goods manufactured/stored in their premises. Therefore, the respondents were duty bound to account for these goods under all circumstances. The Department could not issue any notice to M/s Arora Alloys Ltd. when the respondents had not produced any document regarding the procurement of these goods from that company and their is also nothing on the record if any representative of that company corroborated this version of the respondents before the adjudicating authority.

(3.) For having failed to account for the excisable goods, the adjudicating authority rightly ordered the confiscation of the same and imposed the redemption fine and the penalty. The ratio of the law laid down in the case of CCE, Indore v. Ajmer Food Indus., 2004 (60) RLT 297, referred to by the learned counsel is not attracted to the facts of the present case.