ORDER
S.S. Sekhon, Member (T)
1. After hearing both sides for some time it transpires that the main appeal, only on penalty, could be disposed of after waiver of pre-deposit, the same is taken up for disposal.
2. The lower authorities have not found any demand of duty and/or removals with intent to evade duty. They have imposed a penalty under Rule 25 of Central Excise (No. 2) Rules, 2001 of Rs. 50,000/- on the grounds that the department was not disclosed the fact of impugned goods i.e. Textiles were being taken out of BSR for reprocessing and they were not properly accounted in the statutory records on removal and return.
3. Considering, on perusal of Rule 25, the violation mentioned are on account of removal by an unregistered manufacturer with interest to evade. The violation of ‘does not account’ is only to be considered. From the CCE (Appeals) order, impugned, it is apparent that a verification was got done through the Range Superintendents who reported, “……the assessee has maintained daily stock account and the quantity for refinishing has been shown by them as removal for refinishing as Quantity Cleared for other purpose, as well as shown in the monthly ER-1 also”. The reprocessed goods were having specific identification marks which are recorded in Computerised Daily Production Report. Therefore the duty demands were set aside. This elaborate system of control in the factory, would induce us to come to a finding that ‘accounts at any given time could be effectively made and reported’. Therefore, no reason to arrive at charge of does not account could be upheld. The penalty under Rule 25 is therefore set aside and appeal allowed.