2005 (4) TMI 371 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods
2. Confirmation of duty
3. Imposition of penalty
4. Non-issuance of proper challan
5. Liability of the cutter

Confiscation of Goods:
The judgment pertains to appeals filed against the confiscation of goods, confirmation of duty, and imposition of penalty. The appellants, engaged in manufacturing ingots, cleared goods to a job worker for conversion into flats. Subsequently, they sent the goods to a cutter for defect removal without issuing another challan in the cutter's name. The Tribunal found that the initial movement of goods was not illegal, and the appellants did not clear the goods without payment of duty. Thus, the confirmation of duty and penalty could not be sustained. The appellants were directed to pay duty upon receiving the goods back from the cutter at the time of clearance.

Confirmation of Duty and Imposition of Penalty:
As there was no duty evasion by the appellants, the confiscation of goods was not justified. The penalty of Rs. 20,000 was imposed on the appellants for the lapse of non-issuance of the proper challan. However, the penalty confirmed on the cutter was set aside since he acted in good faith, promptly disclosing the ownership of the goods and the purpose of receiving them for edge cutting. The provisions of Rule 209A were deemed inapplicable to the cutter, leading to the modification of the impugned order.

Liability of the Cutter:
The judgment clarified that the penalty imposed on the cutter was not sustainable due to his genuine actions and lack of any malicious intent. The cutter promptly disclosed the ownership of the goods and the purpose of receiving them for defect removal. Consequently, the penalty against the cutter was set aside, and the impugned order was modified accordingly.

In conclusion, the Tribunal ruled in favor of the appellants regarding the duty confirmation and confiscation of goods issues, while upholding the penalty on the appellants for the non-issuance of the proper challan. The penalty imposed on the cutter was set aside based on his genuine actions and lack of any wrongdoing.