Judgment:
1. The appellant filed this appeal against adjudication order passed by the Commissioner of Central Excise whereby the unaccounted goods such as cigarette tissue paper, filter tip paper, filter rods were confiscated and released on payment of redemption fine. A penalty of Rs. 10,000/- was also imposed on the appellant.
2. The brief facts of the case are that on 4-2-1995, the officers of Revenue visited the factory of the appellants. On verification of the record, it was found that there were certain discrepancies in the stock of packing material and certain other goods which are used in the manufacture of cigarettes. A show cause notice was issued to the appellant for confiscation of unaccounted goods as the appellants contravened the provisions of Rule 94 read with Rule 226 and 209 of Central Excise Rules.
3. The contention of the appellant is that on the date of visit i.e.
4-2-1995 only cut tobacco was prescribed as principal raw material under Rule 55 of Central Excise Rules and cigarette manufacturer has to maintain the proper record as prescribed in respect of the principal raw material i.e. cut tobacco only. The contention is that only on 10-4-1995 a Trade Notice No. 37/95 was issued whereby certain other goods used in the manufacture of cigarettes were also prescribed as principal raw material and manufacturer has to maintain the prescribed record. Prior to this date only cut tobacco was prescribed as principal raw material and there was no excess or shortage in stock i.e. cut tobacco, therefore, the confiscation of the other materials which were not prescribed the principal raw material under Rule 55 of Central Excise Rules is not sustainable.
4. The contention of the Revenue is that the appellants were receiving various materials, which are used in the manufacture of cigarette, and these materials were kept in the factory without maintaining of stock register as required under Rule 94 of Central Excise Rules. Therefore, the unaccounted material was liable for confiscation.
5. I find that in this case on 4-2-1995 the material such as cigarette tissue paper, stickers, filter tip paper and filter rods were not properly accounted in the record maintained by the appellant. On this date, only the cut tobacco was declared principal raw material and the manufacturer of cigarette is required to maintain a record in a specified form regarding cut tobacco. In respect of the other materials such as corrugated fiber carton, cigarette tissue paper, filter tip paper and filter rods, the Allahabad Collectorate issued a Trade Notice dated 104-1995 whereby it was directed to all cigarette manufacturer failing with the jurisdictional, Central Excise Collectorate, Allahabad to maintain the provisions prescribed under Rule 55 of Central Excise Rules in respect of the raw materials mentioned above and they were directed to maintain an account in this respect in the proforma attached to the Trade Notice. Subsequent to this Trade Notice another Trade Notice dated 19-5-1995, the items such as cigarette tissue paper, filter rod, CFC, shells and slides, filter tipped paper and stickers were prescribed as principal manufacturer in addition to the cut tobacco under Rule 94 of Central Excise Rules. Thereafter, another circular was issued by the Commissioner, Allahabad dated 27-6-1995 to this effect. In these circumstances, I find force in the arguments of the appellant that on the date of visit there was no Trade Notice or Board's circular in respect of the goods in question to maintain the stocks in specified manners. The Revenue has not produced any evidence by way of Trade Notice or Circular to this effect on the date of visit by the Revenue authorities, when the goods in question were seized as principal raw material for the manufacture of cigarette and manufacturer has to maintain the record in a prescribed manner. In these circumstances, the impugned order is set aside and the appeal is allowed.