Vidyut Electrical Industries Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. this appeal is directed against the order dated 31-3-1992 passed by the commissioner of central excise (appeals), new delhi. the brief facts are that the appellants here in manufacture bare copper wire and super enamelled copper wire falling under heading 74.08 and 85.44 of the central excise tariff act, 1985. on 23-11-1991, the officers of the department visited their factory and they found that a quantity of 1754 kgs. of bare copper wire was found in excess of the recorded balance in their production account rg 1 register. the appellants manufacture their copper wire and use it in the manufacture of their other product super enamelled copper wire. the proprietor of the appellant in a statement admitted the non-accountal and explained that it was due to the fact that he could not attend the factory for the past 10 days due to domestic problems. proceedings were initiated against the appellants which resulted in the order dated 30-1-1992 passed by the assistant commissioner of central excise mod-iv of delhi commissionerate. the assistant commissioner found the charges established, ordered confiscation of the seized unaccounted quantity fixing a redemption fine of rs. 30,000/-. he also imposed a penalty of rs. 10,000/- on the appellants under rule 173q of the central excise rules. on an appeal against the assistant commissioner's order, the commissioner (appeals) modified the order of the assistant commissioner only to the extent of reducing the redemption fine to rs. 20,000/- and the penalty to rs. 5,000/-. heard shri j.s. agarwal, the learned counsel for the appellants and shri y.r. kilania, the learned departmental representative.2. on a careful consideration of the submissions it is seen that the offence of non-accountal of the bare copper wire has not been denied by the appellants who have only pleaded that it had occured due to certain domestic problems of the proprietor. the learned counsel however, contended that since the excisable goods in this case had not been removed from the factory of manufacturer their confiscation is not correct in law. the reliance placed in this regard on the tribunal decision in the case of garden silk mills v. collector of central excise, baroda, reported in 1991 (51) e.l.t. 373 (tribunal) is well founded. in that case also excisable goods found unaccounted in the factory of production in fully manufactured and packed condition had been seized and confiscated but tribunal set aside the confiscation holding that the power of confiscation under rule 173q is not attracted to goods which were still in the factory and which had not reached the stage of removal. the ratio of this decision is fully applicable to the present case and following it the order of confiscation and fine on the goods is set aside. however, offence of non-accountal of the excisable goods is fully established by the evidence on record and the levy of the penalty on the appellants as maintained by the commissioner (appeals) is reasonable and needs no modification. the appeal is, therefore, disposed of holding that the order of confiscation is set aside .the other aspect of the order of the lower authority is upheld .the appeal is disposed of accordingly. the appellants will be eligible to consequential relief as per the law.

Judgment:
1. This appeal is directed against the order dated 31-3-1992 passed by the Commissioner of Central Excise (Appeals), New Delhi. The brief facts are that the appellants here in manufacture Bare Copper Wire and Super Enamelled Copper Wire falling under Heading 74.08 and 85.44 of the Central Excise Tariff Act, 1985. On 23-11-1991, the officers of the department visited their factory and they found that a quantity of 1754 kgs. of bare copper wire was found in excess of the recorded balance in their production account RG 1 Register. The appellants manufacture their copper wire and use it in the manufacture of their other product super enamelled copper wire. The proprietor of the appellant in a statement admitted the non-accountal and explained that it was due to the fact that he could not attend the factory for the past 10 days due to domestic problems. Proceedings were initiated against the appellants which resulted in the order dated 30-1-1992 passed by the Assistant Commissioner of Central Excise Mod-IV of Delhi Commissionerate. The Assistant Commissioner found the charges established, ordered confiscation of the seized unaccounted quantity fixing a redemption fine of Rs. 30,000/-. He also imposed a penalty of Rs. 10,000/- on the appellants under Rule 173Q of the Central Excise Rules. On an appeal against the Assistant Commissioner's order, the Commissioner (Appeals) modified the order of the Assistant commissioner only to the extent of reducing the redemption fine to Rs. 20,000/- and the penalty to Rs. 5,000/-. Heard Shri J.S. Agarwal, the learned Counsel for the appellants and Shri Y.R. Kilania, the learned Departmental Representative.

2. On a careful consideration of the submissions it is seen that the offence of non-accountal of the bare copper wire has not been denied by the appellants who have only pleaded that it had occured due to certain domestic problems of the proprietor. The learned Counsel however, contended that since the excisable goods in this case had not been removed from the factory of manufacturer their confiscation is not correct in law. The reliance placed in this regard on the Tribunal decision in the case of Garden Silk Mills v. Collector of Central Excise, Baroda, reported in 1991 (51) E.L.T. 373 (Tribunal) is well founded. In that case also excisable goods found unaccounted in the factory of production in fully manufactured and packed condition had been seized and confiscated but Tribunal set aside the confiscation holding that the power of confiscation under Rule 173Q is not attracted to goods which were still in the factory and which had not reached the stage of removal. The ratio of this decision is fully applicable to the present case and following it the order of confiscation and fine on the goods is set aside. However, offence of non-accountal of the excisable goods is fully established by the evidence on record and the levy of the penalty on the appellants as maintained by the Commissioner (Appeals) is reasonable and needs no modification. The appeal is, therefore, disposed of holding that the order of confiscation is set aside .The other aspect of the order of the lower authority is upheld .The appeal is disposed of accordingly. The appellants will be eligible to consequential relief as per the law.