2003 (2) TMI 379 - AT - Central Excise

Summary

Issues Involved:
1. Clandestine clearance of goods without payment of duty.
2. Penalty on transport operators and consignment agents for aiding and abetting.
3. Confiscation of goods.
4. Knowledge or reason to believe regarding the non-duty paid nature of goods.
5. Locus standi of M/s. Narain Das Wadhuram.

Issue-Wise Detailed Analysis:

1. Clandestine Clearance of Goods Without Payment of Duty:
The Commissioner of Central Excise, Bombay-III, issued a Show Cause Notice to M/s. Twincity Organics Pvt. Ltd. (TOPL) and M/s. Dyes Distributors (India) Ltd. (DDIL), among others, for unrecorded production and clearance of camphor and other excisable goods. Private accounts seized from their premises showed unrecorded production and clearance. The authenticity of these records was admitted by the Directors and officers of the two companies. The modus operandi involved duplicate sets of invoices and the destruction of clearance documents by transporters.

2. Penalty on Transport Operators and Consignment Agents for Aiding and Abetting:
The Commissioner imposed penalties on various transport operators and consignment agents under Rule 209A of the Central Excise Rules. The charge was aiding and abetting TOPL and DDIL in the clandestine clearance of goods. However, the Tribunal found that the evidence did not establish that these transporters and agents had knowledge or reason to believe that the goods were liable to confiscation.

3. Confiscation of Goods:
The Commissioner ordered the confiscation of goods seized from TOPL and DDIL. The Tribunal upheld the confiscation orders, noting clear admissions by the manufacturing units that substantial goods were cleared without payment of duty and that documents were prepared to obscure this fact.

4. Knowledge or Reason to Believe Regarding the Non-Duty Paid Nature of Goods:
The Tribunal emphasized that for penalties to be imposed, it must be proven that the transport operators and consignment agents had conscious knowledge or reason to believe that the goods were non-duty paid. The Tribunal found that the evidence did not establish such knowledge. The practice of incorrect or benami documentation in transportation was noted as common, and the evidence did not show that the transporters were aware they were aiding in evasion of Central Excise Duty.

5. Locus Standi of M/s. Narain Das Wadhuram:
M/s. Narain Das Wadhuram claimed ownership of part of the confiscated goods and argued that a show cause notice should have been issued to them. The Tribunal found that their claim of ownership was not substantiated in the show cause notice, and therefore, they had no locus standi to file an appeal. Consequently, their appeal was dismissed.

Conclusion:
1. The orders of confiscation of the seized goods were upheld.
2. The appeal filed by M/s. Narain Das Wadhuram was dismissed.
3. The penalties imposed upon all the appellants were set aside.