ORDER
M.V. Ravindran, Member (J)
1. The issue involved in this case is in respect of imposition of penalty and redemption fine on the goods which was found in excess during the visits of the Central Excise Officers.
2. Relevant facts for the consideration are that the appellants factory was visited by the officers of Revenue on 30th August, 2001 and on physical verification of the stock, the officers found 8363.32 Sq. Meter of plywood and 25.590.46 Sq. Meter of Veneer excess, than the recorded balance in the Daily Stock Account Register. On a reasonable suspicion, these goods were seized by the officers and a Show Cause Notice was issued to the appellant for confiscation of these goods and imposition of the penalty . On adjudication, the adjudicating authority confiscated these goods but directed the appellants to release the same on payment of Redemption Fine of Rs. 2.00 Lakhs (Rupees Two Lakhs) and also imposed a penalty of Rs. 50,000.00 (Rupees Fifty Thousand) on the appellants. On an appeal, the Commissioner (Appeals) upheld the confiscation and a Redemption fine imposed but reduced the penalty from Rs. 50,000.00 (Rupees Fifty Thousand) to Rs. 25,000.00 (Rupees Twenty Five Thousand).
3. The Ld. Consultant appearing for the Appellant submits that the seizure of the goods was in fact not correct as these goods were in-process goods. He draws my attention to the letter dated 5/9/01 which was sent to the Commissioner of Central Excise immediately on the seizure of the goods in their factory. He submits that in that letter they had categorically intimated that the goods seized were in fact in-process and they have not reached the RG-I stage . He also ,further, submits that there is no mens rea on the part of the appellant not to account the goods in the statutory books.
4. The Ld. D.R. on the other hand submits that the goods in question i.e. plywood and veneer are ready for dispatch as soon as they are stamped by the factory manufacturing, gate . He submits that in this case the goods were stamped in all respects and were found outside the bonded store room . Hence, there is reasonable belief that these goods would have been removed clandestinely and hence the confiscation is correct and it has to be upheld.
5. Considered the submissions made by both sides and perused the records. I find that in the Show Cause Notice there is no allegation regarding the intention of the appellants to remove the goods which was found in excess. It is a settled law that in order to confiscate the goods, the Show Cause Notice is to bring out the intention of the appellants to remove the goods clandestinely then only the question of attempt to remove the goods clandestinely would be attracted. I also, further, notice that the appellants had immediately i.e. on 5/9/2001 informed the Revenue Authorities that these goods were in-process and they have not attained the RG-I stage for recording in RG-I. The Revenue Authorities surprisingly kept quiet on the issue and did not draw any sample for getting the same tested whether goods have reached RG-I stage or not. In the absence of any such contrary evidence, it is to be accepted that the goods might not have reached the RG-I Stage.
Further, I find that in identical issue in respect of the goods not accounted in the RG-I and when there is no intention to remove the goods clandestinely, the Hon’ble Tribunal in the case of Bhillai Conductors (P) Ltd. v. CCE Raipur 2000 (125) E.L.T. 781 (Tribunal) has held categorically that just merely because the goods were not accounted, does not mean that there was an intention to remove the goods clandestinely and Rule 173Q now Rule 25 requires mens rea for imposition of the penalty and confiscation of the goods not accounted. Following the said decision , I hold that confiscation of the said goods are not correct and implugned order is set aside. Consequently, the Redemption Fine imposed upon the appellant is also set aside along with the penalty imposed on the appellant.
But I do find that the appellant have violated the provisions of Central Excise Law in as much that they have not recorded the in-process goods anywhere in the records, which was the duty of the appellant to record these somewhere in the records in order to justify and prove that point to the authorities. In view of this I impose a penalty of Rs. 5,000.00 (Rupees Five Thousand only) under Rule 27 of the Central Excise Rules 2002. The penalty has to be paid forthwith .
The appeal allowed partly as per modification as mentioned above.
Pronounced in the open court.