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According to Rule 25 of the Central Excise Rules of 2002, the raw material cannot be confiscated: CESTAT, Delhi

In a recent case, the bank of the Delhi Customs, Excise and Services Tax Appeal Court ruled that the raw material cannot be seized under Rule 25 of the 2002 Central Consumption Tax Rules. According to the facts, the complainant is a company that is engaged in the production of sponge iron, MS Ingots and Silico Manganese. The team of prevention officers for central consumption, customs and service tax searched the premises twice in November 2015. These searches were carried out on the information about the procurement of undetected raw materials and the stealth manufacture of excise goods without recording them in their daily inventory account and removing them without paying the central excise duty. The documents were recovered during the search and the investigation team was given a supply of finished goods and raw materials during the physical inspection.

After reviewing the document and reports, it was found that there are excess and undetected stocks of raw materials on the factory premises. For this reason, the complainants received an exhibition notice suggesting the seizure of the raw materials to be seized with the imposition of a sanction. In this context, the complainant has insisted that the accounts for the surplus raw material have not yet been recorded and there was no such allegation that the record was not kept by the complainant for a long time. It was also alleged that there was no evidence to support the alleged clandestine removal allegations as the excess goods on the factory premises were not intended for more than a day’s production. Therefore, failure to record the production log of that day cannot be a reason to impose a penalty.

In the light of all the arguments and arguments, the court found that the records show that the applicant requested the opportunity to question the witness who was refused the opportunity to question. This is the basic rule for ensuring a fair trial, the failure of which in the absence of verified evidence will adversely affect the department. The department has not produced any such evidence to support their allegations. However, in the absence of this, given the recognition that the lack of termination is only one day production, even if the record under Rule 10 is missing, this does not justify the application of Rule 25 (1) (b) of the Central Excise Rules, 2002.

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