ORDER
V.K. Agrawal
1. M/s R.S.L. Ltd. have filed the present appeal, being aggrieved with the Order No. 1346-CE/BPL/99 dated 3.11.1999 in which Commissioner (Appeals) has upheld the Adjudication Order imposing penalty of Rs.2,00,000/- and confiscating excisable goods, namely Strips of Iron & Steel and Waste and scrap valued at Rs.33,99,,683/- for non-accounting them in RG-I Register with an option to redeem the same on payment of fine of Rs.5,00,000/-.
2. Shri Naveen Mullick, learned Advocate, mentioned that on their visit to the factory premises of the Appellant on 19.9.1997, the Central Excise Officers found the following goods lying unaccounted in RG-I Register:-
Srl. Description Quantity (MT) Value in Rs.
1. G.S.Strips 41.059 12,52,792-00
(below 60 mm)
2. C.R. Strips
(below 60 mm) 25.710 4,88,490-00
3. Waste & Scrap 19.900 1,19,400-00
4. C.R. Strips 81.000 15,39,000-00
33,99,682-00
3. The learned Advocate submitted that the seizure was effected without taking into consideration the process of manufacture of the final products; that the major raw material, H.R. coils, was found quite correct in Raw Material Record which is evident from Panchnama: that only after the goods were finally packed that they were accounted for in the R.G.Register; that similarly the products sent for galvanising were accounted for in RG-I only after the process of galvanising and packing was over; that this practice was followed by them right from the beginning and was very much in the knowledge of the officers; that the seizure was effected of all the goods lying in the production area in unpacked condition and also packed during the day, i.e., 19.9.97 which would have been entered in RG-I after full packing by the next day as was the practice and that the factory day gets over at 6.00 Hrs. the next day; that Shri Rajiv Bidasara, Director in his statement dated 19.9.97, has deposed that the goods were found in excess due to goods being in unwrapped condition. He, further, mentioned that the Appellants maintain a separate process register in which proper care was taken by them to account for the goods at very stage of the manufacture; that this register shows the entire quantity of 66.769 MT of C.R.and G.S. strips were packed on 19.9.97 and would have been accounted for as 19.9.97 production by the next day and the remaining quantity of 18.719 MT. of C.R. strips was lying unpacked which was packed on 4.10.97 and had been shown as production of that day; that MT of C.R. strips were in am semifinished stage awaiting process of galvanising within the factory; that the generation of waste and scrap on day to day was of a very small quantity and it was being accounted only when there was a sumptuous quality and any trader visited the factory for purchasing the same. The learned Advocate relied upon the decision in the case of Bhilai Conductors (P) Ltd. vs. CCE, Kanpur, 2000 (91) ECR 569 (T) wherein it was held that in absence of mens rea, neither confiscation nor imposition of penalty is sustainable under Rule 1730. Reliance was also placed on the decision in the case of National Industries vs. CCE, 2000 (41) RLT 156.
4. Countering the arguments, Shri S.C.Pushkarna, learned D.R., submitted that Shri Bidasaria, in his statement, had clearly admitted that the seized goods were excluding the production of that day, i.e. 19.9.97 and the reasons given by him for excess stock was improper accounting at production stage.The learned D.R. also referred to the finding of the Deputy Commissioner in the Adjudication Order (Paragraph 14) to the effect that “At no stage the production level has been to the tune of 20 M.T. and above except for the date of the seizure. All along the production, which has been entered in RG-I register, has been ranging from 8.10 Tonnes. He also reiterated the findings of the Deputy Commissioner and the findings contained in the impugned Order. In reply, the learned Advocate mentioned that there is no mention of day’s production in Panchnama; that the perusal of RG-I register would show that the packed production accounted for on certain days is much more than 20 M.T. and 27.4.97 it was 233 M.T. maximum.
5. I have considered the submissions of both the sides. The facts which are not in dispute are that the goods worth almost Rs.34 lakhs were found unaccounted in the factory premises of the Appellants. Neither it is mentioned in Panchnama nor in the statement of Shri Bidasaria, Director, that C.R. strips weighting 81 M.T. were in semifinished condition. It is only mentioned in Panchnama that it was running production for captive consumption. Shri Bidasarai has clearly stated, in his statement recorded on the day of seizure itself, that the unaccounted stock was “excluding today’s production”, and he has fully satisfied with the physical stock verification done by the Central Excise Officers. Nowhere in this statement Shri Bidasarja mentioned about the practice of recording the production in RGI only after wrapping the same. In addition, G.S. strip and C.R. strips were found in duly packed condition which was also lying in the factory premises without being accounted for in the statutory register. Nothing is there to indicate that the same was wrapped only on the date of visit of the officers. Once the goods had been packed, there was no reason to wait for their being recorded in RGI on next day. It is the requirement of Rule 53 of the Central Excise Rules that day’s production has to be entered daily. This requirement is an important requirement to prevent the removal of excisable goods without accounting in prescribed register and without payment of duty. The waste and scrap weighing 33 M.T. was found completely unaccounted and the reasons advanced fro non-accounting is not at all satisfactory. The facts in the case of Bhillai Conductors are different in as much in the said case the goods were manufactured on the day of seizure and were not lasted and had thus not reached RGI stage and the packed goods were also day’s production and the job of packing was not completed due to power failure. I am, therefore, of the view that goods are liable of confiscation and penalty is imposable on the Appellants. Taking into consideration all facts and circumstances of the case I uphold the penalty imposed upon the Appellants. I, however, reduce the redemption fine to Rs.4 lakhs only. The appeal is disposed of in the above terms.