2005 (4) TMI 360 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods purchased from a manufacturer without duty payment.
2. Imposition of penalty on the appellants under Rule 209A of the Central Excise Rules.

Analysis:

Issue 1: Confiscation of Goods
The appellants had purchased Multi-media speakers from M/s. Technocrat System, a manufacturer, and the goods were seized by the department on the grounds that they were branded and required duty payment by the manufacturer. The adjudicating authority confiscated the goods and imposed a penalty under Rule 209A. The Commissioner (Appeals) upheld the decision but reduced the fine and penalty. The appellants argued that they were unaware of the manufacturer's duty liability and treated Technocrat System as a dealer, not a manufacturer. The Tribunal referenced previous cases emphasizing that the onus is on the department to prove knowledge of the non-dutiable nature of goods and that if the appellants are not the manufacturer and not liable for duty, the goods are not subject to confiscation.

Issue 2: Imposition of Penalty
The JDR was asked to provide evidence of the appellants' knowledge regarding the confiscation liability of the goods. Referring to a statement by the appellants' proprietor, where he claimed ignorance of the excisability of the purchased goods, the JDR argued that this statement implied the appellants were aware of the confiscation liability. However, the Tribunal found that the proprietor's statement clearly indicated his lack of awareness regarding the excisability of the goods, leading to the conclusion that the appellants were not aware of the duty payment status. Consequently, the Tribunal deemed the confiscation and penalty imposition unjustifiable, overturning the Commissioner (Appeals) decision and allowing the appeal.

In conclusion, the Tribunal set aside the penalty and confiscation of the goods, ruling in favor of the appellants based on the lack of evidence proving their knowledge of the duty liability on the purchased goods.