Latest Excise Judgements - I

2006(199)E.L.T.237 (Tri.-Del.)
IN THE CESTAT PRINCIPAL BENCH, NEW DELHI
Shri C. .B. Nair, Member (T)
DAYAL INDUSTRIES

Versus

COMMISSIONER OF CENTRAL EXCISE, DELHI-II
Final Order No.611/2006-SM(BR)(PB) & Stay Order No.396/2006-SM(BR)(PB)
DATED 13-4-2006 in appeal No.E/691/2006

SSI Exemption – Records of production and clearance not required to be maintained - Production and clearance within exempted limits – Penalty imposed as no records maintained to ascertain eligibility HELD: No statutory obligation to maintain production account – Rule 25 not invocable – Penalty imposed set aside and appeal allowed – Seized goods to be returned – Rule 25 of Central Excise Rules 2002 (paras 2,3,4)

APPEAL ALLOWED

REPRESENTED BY:
Shri Naveen Mullick, Advocate for the Appellant
Shri S.L. Meena D.R., for the Respondent.

ORDER – upon hearing both sides on stay application, I find that appeal itself is required to be disposed of. Accordingly, after waiving the requirement for deposit, I proceed to dispose of the appeal.

Appellant is a small scale unit. Its production and clearance are below the annual exempted amount. Therefore, it is not required to be registered with the Central Excise or to keep any statutory account of production and clearance. All the same, appellant was visited by the Central Excise (officers) on 9-10-2002 and goods lying in stock were seized. Under the impugned order, despite the finding that the appellant was not required to maintain statutory record of production, a penalty of Rs.10,000/- has been confirmed under Rule 25 of the Central Excise Rules. The finding is that the absence of statutory obligation to maintain record of production does not mean that the appellants are not required to maintain any record of production and clearances, in the absence of correct records, they shall not be able to find as to when they crossed the specified limit.

The submission of the learned Counsel is that in the absence of any statutory obligation to maintain account of production, there cannot be violation of Rule 25 of the Central Excise Rules inasmuch as that rule relates to violation of the provision of the statute.

There is merit in the appellant’s contention. Since the appellant was not under any statutory obligation to keep the account of production, Rule 25 could not be invoked against it. Penalty imposed is set aside and the appeal is allowed. The seized goods shall be returned to the appellant.

Source : Excise Law Times