Per Justice U.L. Bhat :

This appeal is directed against the order passed by the Additional Collector of Central Excise, Jaipur ordering confiscation of seized goods, allowing redemption on payment of fine of Rs. 10,000, demanding duty on goods found short and demanding duty short paid by the unit by wilful misstatement and suppression of facts and appropriating amount irregularly availed credit of and imposing penalty of Rs. 1000.

2. Appellant is engaged in the manufacture of headlights and accessories thereof falling under sub-heading 8512.00 of the Schedule to the Central Excise Tariff Act, 1985 (for short, CETA) In the course of surprise visit by Anti Evasion staff, the following discrepancies were found -

(1) 846 units of headlight were found in excess.

(2) There was shortage of 787 units of headlights of another model cleared without payment of duty.

(3) There were suppression of the fact that in supplying headlights to M/s. Maruti Udyog Limited, bulbs were also fitted and the value of such bulbs was not included in the value of headlights thereby evading duty.

(4) There was irregular availment of credit.

Appellant resisted the proposals in the show cause notice based on the irregularities and also contended that the claim in regard to valuation was barred by time. The Additional Collector overruled these contentions and passed the impugned order. Hence the present appeal.

3. The surprise visit was on 16th and 17th June, 1987. It was found that 846 units of headlights were in excess over the recorded stock. By a letter dated 23.6.87 the appellant informed the Assistant Collector that the Anti Evasion party had not correctly counted the stock in spite of objection and subsequently the appellant verified and found that there was excess of only nine units. In reply to the show cause notice, however, it was stated that at the time of surprise visit production of 624 units on 15.6.87 had not been entered in the R.G.1 register and this accounted for bulk of the excess found. The Additional Collector was not satisfied with this explanation. It is significant to note that within a few days of the surprise visit, namely, 23.6.87 when the appellant wrote to the Assistant Collector it was not stated that the bulk of the excess was on account of non-recording in the R.G.1 register of the head lights produced on 15.6.87. No materials were produced before us to show that 624 units were produced on 15.6.87 and had not been incorporated in the R.G.1 register before the surprise visit on 16.6.87. In the circumstances, the challenge against the excess found has to fail.

4. The Panchnama recites that 787 units of another model of headlight was found short. It was also alleged that the goods had been cleared without payment of duty. In reply to the show cause notice, appellant stated that 338 units were broken and the broken pieces were lying in the bonded store room and 320 units were in the finishing room as can be seen from the entry made in column 15 of the R.G.1 register and this had not been taken into account. Fifty pieces were said to have been lying separately for export. This stand was also not taken in the letter dated 23.6.87. No other material was produced to prove that 338 units had been broken and the broken pieces were lying in the bonded store room. There is nothing to indicate that 320 pieces lying in the finishing room had not been taken into account by the excise officers. In the circumstances, the challenge against this finding also must fail.

5. It is next contended that even if it is found that 846 units were in excess the same cannot be confiscated. For this purpose reliance was placed on the decision of the Andhra Pradesh High Court in Southern Steel Ltd. vs. Union of India, 1979 ELT (J420) and the decision of the Tribunal in Kamal Plywood & Allied Industries P. Ltd. Vs. Collector of Central Excise, Meerut, 1996 (82) ELT 323. In the first case goods were found in excess and were seized. Goods had not been remo