PREMIUM MOULDINGS AND PRESSING Vs. CCE

JUDGEMENT

(1.) The appellants are manufacturers of Steering Wheels and other motor vehicle parts. On 7.2.2001, officers of Central Excise visited their factory and found excess stock of both finished goods and raw materials. 482 Nos. of Steering Wheels valued at Rs. 1,03,984 and 2.025 MTs of Iron and Steel Scrap valued at Rs. 13,162 were found in excess vis -a -vis RG -1. Various Cenvatable inputs totally valued at Rs. 7,16,979 were also found in excess of the balance recorded in "raw material stock summary". All the materials found in excess were seized by the officers who believed that the goods were liable to confiscation. A statement of Shri Harish Chandran, Manager (Accounts) and Authorised Signatory of the Company, was also recorded. Shri Harish Chandran was satisfied with the manner of -stock -taking and he admitted the excess stock. He, however, could not explain the discrepancy. The Department, by show -cause notice, proposed to confiscate the seized goods under Rule 173 -Q of the Central Excise Rules, 1944 as also to impose penalty on the party under the said Rule. The proposals were contested. The adjudicating authority confiscated the goods with option to the party to redeem the same against payment of a fine of Rs. 2 lakhs. It also imposed a penalty of Rs. 50,000 on the party. The appeal preferred by the assessee against the decision of the original authority did not succeed before the Commissioner (Appeals). Hence, the present appeal.

(2.) Heard both the sides. The Counsel for the appellants submits that neither confiscation nor penalty can be sustained on any ground relatable to the seized inputs inasmuch as Rule 173 -Q is not applicable to inputs. In this connection, the Counsel relies on the Tribunal's decision in CCE, Indore v. Ajmer Food Industries, 2004 (60) RLT 297. With regard to finished goods confiscated by the lower authorities, Counsel submits that, apparently, the goods have been confiscated on the basis of the confessional statement of Shri Harish Chandran. Shri Harish Chandran was only Incharge of accounts of the Company at the material time and was not competent to comment on the excess stock of materials. According to the Counsel, Shri Harish Chandran's statement has no evidentiary value insofar as stock discrepancy is concerned. Therefore, Counsel submits, the order of confiscation of the finished goods and consequential penalty cannot be sustained. Without prejudice to this plea, the Counsel submits that the fine and penalty imposed are too high.

(3.) The DR submits that Shri Harish Chandran was the authorised signatory of the company and was competent to give the statement at the material time. He clearly admitted the excess stock. With regard to the Counsel's contention that Rule 173 -Q is not applicable to inputs, the DR cites the Tribunal's decision in Laxmi Polypack v. CCE, Hyderabad, 2003 (86) ECC 63 (Tri.) : 2003 (56) RLT 64.