2005 (8) TMI 516 - AT - Central Excise

Summary

Issues:
- Appeal against setting aside redemption fine and penalties
- Confiscation of goods seized outside the factory
- Provisional release of goods
- Duty payment evasion and penalty imposition
- Comparison with relevant legal precedents

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved challenging the Order-in-Appeal passed by the Commissioner (Appeals) regarding the redemption fine and penalties set aside for goods seized outside the factory. The Revenue contended that the respondents, engaged in Pan Masala manufacturing, had goods seized without duty payment documents. The seized goods were provisionally released to the respondents, who failed to produce duty payment evidence, leading to a show cause notice for confiscation, duty demand, and penalties. The adjudicating authority imposed a redemption fine and penalty on the firm.

The Revenue argued that since the goods were cleared without duty payment and seized outside the factory, penal action under Section 11AC of Central Excise Rules was warranted. Citing the Supreme Court case of Weston Components Ltd., the Revenue asserted that non-availability of goods did not exempt them from confiscation. The Commissioner (Appeals) set aside the redemption fine, but the Tribunal found this decision unsustainable based on the Weston Components Ltd. case, where the Supreme Court upheld imposing redemption fine even if goods were unavailable.

Regarding penalties, the Tribunal noted the clear intention of the respondent to evade duty payment by clearing seized goods without payment. Drawing a distinction from the Rashtriya Ispat Nigam Ltd. case, where no clandestine removal occurred, the Tribunal deemed the penalty setting aside not sustainable. Consequently, the impugned order setting aside confiscation, redemption fine, and penalty was overturned, and the Order-in-Original was restored. The appeal was allowed, and cross-objections were disposed of accordingly.

In conclusion, the Tribunal upheld the imposition of redemption fine and penalties in cases of seized goods cleared without duty payment, emphasizing the liability for confiscation even if goods were not available, in line with relevant legal precedents and the provisions of the Central Excise Rules.