These two appeals are departmental appeals filed in the year 2000. The respondents are not present. Heard Shri N.V.B. Nair, learned J.D.R.appearing for the Department. The respondents were penalised on the ground that unrecorded stock were found on verification and the stock was also confiscated. However, on appeal the Commissioner (Appeals) has passed the following order :- I find that in the present case the goods have been seized and subsequently confiscated only for the reason that the appellant did not account for the excisable final product in the simple records showing the production and clearance. The appellants unit is a SSI unit, thereby, they are exempted from maintaining any statutory records and registers, which otherwise a manufacturer is required to maintain, however, the provisions have been made making it obligatory on their part to maintain simple record showing production and clearance, which admittedly the appellants have failed to maintain. Be it as it may, this is not the valid reason for seizure of the goods and its confiscation. It is a well settled law that if the goods are lying in the factory premises and no attempt has been made by the manufacturer to clandestine remove the final product, the goods are not liable for seizure. More so, in the present case, the seizure has been made only for a minor procedural lapse of not accounting the goods in the simple records required to be maintained by a SSI unit. Therefore, the confiscation and consequent imposition of redemption fine is invalid. It is also a well settled legal position that penalty u/r 173Q as well as u/r 209A of the Central Excise Rules, 1944, has to be imposed if the essential ingredients of these rules are present in case of manufacturer/person being penalised. This is in consonance with various decisions of the Courts of law including the Tribunal as discussed in para 3 above. Since in the present case of the appellants, the ingredients of Rule 173Q are not present, the penalty cannot be imposed, in the same manner, the ingredients of Rule 209 A are also absent in the case of penalisation of the Director of the appellant-firm. Therefore, the penalty imposed in the impugned order is not sustainable.
In view of the above findings, the impugned order is set aside, the appellants are warned to be more careful in future in following the Central Excise Law & Procedure. The appeals are allowed.
2. Subsequently, on department's appeal the order of the Commissioner (Appeals) was set aside by the Tribunal 2000 (125) E.L.T. 1238 (Tribunal) but the penalty was reduced on the respondents. The Tribunal's order was passed ex parte, hence respondents filed rectification application but the same was rejected by the Tribunal.
Subsequently, on the respondents special civil application, the Hon'ble High Court of Gujarat has set aside the earlier order passed by the Tribunal including the order on rectification application filed by the respondents.
3. I have gone through the case records and the submissions made, I find that there is no duty demand on the respondents. The Commissioner (Appeals) has taken a lenient view noting that the small scale units are required to maintain only simple record and not statutory registers. He has set aside the order of confiscation and imposition of penalty on the respondents, warning the appellants to be more careful in future in following the Central Excise law and procedures.
4. In the circumstances of this case, since the value of goods was within the limits of small scale exemption and there is no duty demand involved, I am of the view that the impugned order of the Commissioner (Appeals) does not require any interference. As such, the departmental appeals are rejected.