SWAROOP THERMOPACK PVT. LTD. AND Vs. CCE

JUDGEMENT

(1.) The appellants are manufacturer of thermocole products. On 24.2.2000, the Central Excise officers visited their factory and conducted stock taking of the finished goods and inputs. It was found that the RG -23A, Part -I register was not maintained for the last 15 days up to 24.2.2000. The RG -1 register was also not maintained correctly and updated. The officers during stock verification of the raw materials and finished goods found shortage of raw materials on which credit of Rs. 31,713 was taken. The officers also found goods valued at Rs. 1,46,752 in excess than the recorded balance in RG -1 register. The officers also found that the goods were cleared by the appellants on some challans without payment of duty. The duty for such clearance was of Rs. 17,492. Some of the finished goods were also found short than those recorded in RG -1 register for which duty determined was Rs. 9,838. Accordingly, show cause notice was issued to the appellants which was adjudicated by the Addl. Commissioner, who confirmed the demand of Rs. 31,713 on the raw materials found short. He also confirmed the demand of Rs. 9,838 on the finished goods found short and duty of Rs. 17,492 on the goods cleared under challans without payment of duty. The seized finished goods valued at Rs. 1,46,752 involving duty of Rs. 28,716 were confiscated but the appellants was given option to redeem the same on payment of a fine of Rs. 30,000. The Addl. Commissioner also imposed a penalty of Rs. 1 lakh on M/s. Swaroop Thermopack (P) Ltd under Rule 173Q of Central Excise Rules, 1944 and a penalty of Rs. 30,000 under Section 11 AC of the Central Excise Rules, 1944, He also imposed a penalty of Rs. 3,000 each on Shri Robin Khattar, Director and Shri Kailash Chand Kumawat, Authorised Signatory of M/s. Swaroop Thermopack (P) Ltd. under Rule 209 A of the Central Excise Rules, 1944.

(2.) The appeal filed by the appellants before the Commissioner (Appeals) was rejected by him.

(3.) Shri O.K. Tyagi, Ld. Consultant appearing for the appellants pleaded that the seized goods valued at Rs. 1,46,752 found in excess than the recorded balance are not liable for confiscation as it was explained at the time of the visit of the central excise officers that the concerned person, who was making entries in RG -1 register got his hand fractured on 7.2.2000 and due to this, he could not make entries in RG -1 register. Similarly, the entries could not be made in RG -23A, Part -I register although the raw materials were being issued for the manufacture of finished goods and finished goods were being manufactured and cleared. He however, stated that the appellants, M/s. Swaroop Thermopack have already reversed the credit of Rs. 31,713 on the shortage of the raw materials found by the officers and paid the duty of Rs. 9,838 on the shortages of finished goods found by the officers. He is however contesting the confiscation of the seized goods and demand of Rs. 17,492 on the items of thermo pack, which was cleared by them on challans. He stated that the goods found in excess than the recorded balance are not liable for confiscation as the goods were not likely to be removed clandestinely without payment of duty. He relied on the following decisions in support of his pleas: (1) Delton Cables v. CCE, New Delhi, 2001 (135) ELT 1092 (Tri -Del) (2) Empire Fasteners v. CCE, Chandigarh, 2001 (135) ELT 849 (Tri -Del) (3) Sulara Chemicals (P) Ltd. v. CCE, Bolpur, 2002 (145) ELT 230 (Tri -Kol) (4) Sterlite Industries (I) Ltd. v. CCE, 2001 (127) ELT 256 (5) Reliance Industries Ltd. v. CCE, 2004 (173) ELT 106 (Tri -Mum) Regarding demand of Rs. 17,492 confirmed by the lower authorities, he pleaded that the goods were sent by the appellants in small quantity under challans to other manufacturers and they were issuing invoices after adding the total quantity in the challans and then debiting duties. Since the challans were taken by the investigating officers, they could not correlate duty paid by them on the challans. Regarding imposition of penalty, he pleaded that the penalties are very high on the manufacturer as well as on the other two appellants considering the circumstances of the case, which may be set aside.