K-THREE ELECTRONICS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) M /s. K -Three Electronics Pvt. Ltd. have filed the present appeal being aggrieved by the Order -in -Appeal No. 45/2004 dated 30.1.2004 passed by the Commissioner (Appeals).

(2.) SHRI Lajja Ram, learned Advocate, submitted that the Appellants manufacture colour television set and plastic moulded parts; that when the Central Excise Officers visited their factory premises on 28.8.2002 they found finished goods valued at Rs. 8,11,621.42 in excess of the stock recorded in RG -1 register; that the officers also found shortage of raw material namely High Impact Polyesterene weighing 3123.771 kgs. valued at Rs. 1,56,188.55; that the Additional Commissioner under Order -in -Original No. 7/2003 dated 30.5.2003 confiscated excess finished goods and imposed redemption fine of Rs. 2,05,000 and confirmed all other dues mentioned in the show cause notice; that on appeal the Commissioner (Appeals) has upheld the confiscation of the excess finished goods and redemption fine imposed on them as well as denial of Modvat Credit on the shortage of raw material found by the Central Excise Officers. The learned Advocate, further, submitted that television sets manufactured by them are items of precision and sophistication; that number of test technical performance and physical impact are conducted before the television sets are considered to be manufactured; that they are manufacturing television sets for Beltak and the same are accounted for in RG -1 register at the time of despatch only after these have been inspected by their customers; that there is no allegation in the show cause notice that any attempt was being made by the Appellants to remove the same clandestinely; that in view of this there was no ground for confiscation of the finished goods found in excess in the factory. He relied upon the decision in the case of Panihati Rubber Ltd. v. CCE, Calcutta -111, 2001 (131) ELT 344 (Tri) wherein confiscation and penalty was set 'aside as the goods were awaiting inspection by Railway authorities and no evidence of malafide intention -to remove the goods was available. Reliance has also been placed on the decision in the case of Bhilai Conductors P. Ltd. v. CCE, Raipur, 2000 (69) ECC 192 (Tri) : 2000 (125) ELT 781 (Tri).

(3.) IN respect of shortage of inputs learned Advocate submitted that the shortage has occurred on account of loss in sweeping, etc.; that such a loss is minor; that storage loss is allowable as has been held by the Tribunal in the case of Kesar Enterprises Ltd. v. CCE, Final Order No. 1095 -1096/2000 -NB dated 26.8.2002 and the appeal filed by the Revenue has been dismissed by the Supreme Court as reported in 2003 (157) ELT A -256. Reliance has also been placed on the decision in the case of CCE, Auragabad v. Sipta Coated Steel Ltd., 2000 (125) ELT 578 (Tri).