SHRI RENUGA SOFT X TOWELS Vs. CCE

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of textile articles including 'baby receiving blankets'. They have two units viz. Units I & II, which are covered by common Central Excise registration. Prior to 13.5.2003, these units were 100% EOUs covered by common registration. When the EOUs were de -bonded under Final Exit Order dated 13.5.2003 of the Development Commissioner, there was a stock of 5869.7 Kgs. of baby receiving fabric (semi -finished goods) in Unit - I, which was not declared in the 'ER - I' Return filed by the appellants in the month of May 2003. It was only on 4.9.2003 that the officers of Central Excise, who visited the factory, found the above stock. On the basis of their finding, the Department issued a show -cause notice for confiscating the above stock of goods and imposing penalty on the party under Rule 25 of the Central Excise Rules, 2002. These proposals were contested. In adjudication of the dispute, the Commissioner ordered confiscation of the aforesaid quantity of baby receiving fabric valued at Rs. 12,91,334/ -, under Rule 25 ibid with option for redemption against payment of fine of Rs. 1.3 lakhs. He also imposed a penalty of Rs. 50,000/ - on the appellants under the same Rule. Hence the present appeal.

(2.) AFTER hearing both sides and considering their submissions, I find that, admittedly, the above fabrics were in semi -finished condition and were not fit for removal as final product (baby receiving blankets). Rule 25, invoked by the Commissioner, reads as under: