Dharampal Satya Pal Ltd. Vs. Collector of Central Excise - Court Judgment

Excerpt:
1. shri s.d. gaur, ld. consultant, appearing for the appellants submits that the appellants are engaged in the manufacture of pan masala; that during the month of december 1991, the appellants increased the price of pan masala; that with the increase in price, the demand suddenly went down and there was accumulation in stock. he submits that because of this extraordinary phenomena, they had to put the stocks in the gallary, staircase and other rooms outside the bonded store room, but within the factory premises. he submits that the appellants were showing the stock in the records namely daily machine room report, ghan register, production slip and stock card record. he submits that the appellants were under the bonafide belief that if the stocks were lying outside the bonded store room, they were not required to enter the same everyday in the rg 1 register. he submits that the appellants had no intention to evade payment of duty and, therefore, confiscation of the goods was not warranted. he refers to the case of kamal plywood and allied industries pvt. limited, reported in 1996 (82) e.l.t. 323 in support of his contention that the goods, if lying inside the factory cannot be confiscated. the ld. counsel also submits that imposition of penalty was too harsh; if at all there was non-accountal of goods etc., penalty should be governed by rule 226 which envisages a penalty of rs. 2,000/- only.2. shri jangir singh, ld. jdr, appearing for the respondent commissioner submits that the facts of the case are clear; that recording production in rg 1 register is a statutory requirement; that the goods were in fully manufactured form and, therefore, they will be said to be ready for marketing. he, therefore, reiterates the findings of the lower authorities and submits that confiscation of the goods as well as imposition of penalty are justified. he further submits that the ld. collector (appeals) has already accommodated the appellants to a large extent and there is, therefore, no further question of showing any leniency to the appellants.3. heard submissions of both sides. rule 53 of central excise rules requires fully manufactured goods to be recorded in rg 1 register. we find that the goods were fully manufactured as they were found to be packed in cartons. this position can be treated as a marketable position or ready for clearance position. since these goods were not recorded in rg 1 register and were in a form that without any further requirement they could be taken out any moment, confiscation of the goods is justified. in the case cited by the appellant, there were various stages and the tribunal in that case held that the goods had not reached the stage of marketability and, therefore, in that case confiscation of the goods was not considered as valid. the facts of these two cases are thus different and distinguishable. in this view of the matter, we uphold the confiscation of the goods as well as imposition of penalty. coming to the quantum of redemption fine and penalty, we find that the ld. collector (appeals) has already shown leniency and we do not consider the case fit for any further leniency.in the circumstances, we do not see any legal infirmity or otherwise in the impugned order. in the result, the appeal is rejected.

Judgment:
1. Shri S.D. Gaur, ld. Consultant, appearing for the appellants submits that the Appellants are engaged in the manufacture of Pan Masala; that during the month of December 1991, the appellants increased the price of Pan Masala; that with the increase in price, the demand suddenly went down and there was accumulation in stock. He submits that because of this extraordinary phenomena, they had to put the stocks in the gallary, Staircase and other rooms outside the bonded store room, but within the factory premises. He submits that the appellants were showing the stock in the records namely Daily Machine Room Report, Ghan Register, Production Slip and Stock Card Record. He submits that the appellants were under the bonafide belief that if the stocks were lying outside the bonded Store Room, they were not required to enter the same everyday in the RG 1 Register. He submits that the appellants had no intention to evade payment of duty and, therefore, confiscation of the goods was not warranted. He refers to the case of Kamal Plywood and Allied Industries Pvt. Limited, reported in 1996 (82) E.L.T. 323 in support of his contention that the goods, if lying inside the factory cannot be confiscated. The ld. Counsel also submits that imposition of penalty was too harsh; if at all there was non-accountal of goods etc., penalty should be governed by Rule 226 which envisages a penalty of Rs. 2,000/- only.

2. Shri Jangir Singh, ld. JDR, appearing for the respondent Commissioner submits that the facts of the case are clear; that recording production in RG 1 Register is a statutory requirement; that the goods were in fully manufactured form and, therefore, they will be said to be ready for marketing. He, therefore, reiterates the findings of the lower authorities and submits that confiscation of the goods as well as imposition of penalty are justified. He further submits that the ld. Collector (Appeals) has already accommodated the appellants to a large extent and there is, therefore, no further question of showing any leniency to the Appellants.

3. Heard submissions of both sides. Rule 53 of Central Excise Rules requires fully manufactured goods to be recorded in RG 1 Register. We find that the goods were fully manufactured as they were found to be packed in cartons. This position can be treated as a marketable position or ready for clearance position. Since these goods were not recorded in RG 1 Register and were in a form that without any further requirement they could be taken out any moment, confiscation of the goods is justified. In the case cited by the Appellant, there were various stages and the Tribunal in that case held that the goods had not reached the stage of marketability and, therefore, in that case confiscation of the goods was not considered as valid. The facts of these two cases are thus different and distinguishable. In this view of the matter, we uphold the confiscation of the goods as well as imposition of penalty. Coming to the quantum of redemption fine and penalty, we find that the ld. Collector (Appeals) has already shown leniency and we do not consider the case fit for any further leniency.

In the circumstances, we do not see any legal infirmity or otherwise in the impugned order. In the result, the appeal is rejected.