2005 (11) TMI 278 - AT - Central Excise

Summary

Issues:
Challenge against confiscation and redemption fine in respect of a machine.

Analysis:
The appellant filed an appeal against the order-in-appeal passed by the Commissioner (Appeals), specifically contesting the confiscation and redemption fine related to a chain saw stone cutting machine. The machine in question was initially cleared for testing by M/s. Rajasthan Udyog, described as parts and components of a stone cutting machine. Subsequently, after being returned to the manufacturer's factory, it was cleared again on payment of appropriate duty by the appellant. The Revenue officer issued a show cause notice alleging duty evasion and violation of the EPCG Scheme due to the earlier clearance description. The appellant argued that since the machine was cleared under invoice and duty paid upon re-clearance, confiscation was unwarranted. They also claimed entitlement under the EPCG Scheme for duty-free receipt of inputs and capital goods, which was not disputed by the Revenue.

The Revenue contended that the machine was initially cleared for testing without duty payment based on the description as parts and components of a stone working machine by M/s. Rajasthan Udyog, making it liable for confiscation. However, the appellant, M/s. Supreme Marbles & Granites Ltd., the purchaser of the machine, highlighted that they had paid appropriate duty upon receiving the machine under an invoice dated 14-8-2000. The appellant did not contest the penalty imposed on the manufacturer for the earlier incorrect description. Additionally, the allegation of EPCG Scheme violation by using the machine in mines was refuted by the appellant, emphasizing that they had paid the duty for the machine, which contradicted the alleged violation. Consequently, the Tribunal set aside the confiscation of the machine and the consequential redemption fine, allowing the appeal in favor of the appellant.

In conclusion, the judgment revolved around the dispute regarding the confiscation and redemption fine concerning a machine initially cleared for testing without duty payment but subsequently cleared by the appellant after paying the appropriate duty. The Tribunal considered the arguments of both parties, focusing on the EPCG Scheme provisions and the actual duty payment status of the machine. Ultimately, the Tribunal ruled in favor of the appellant, M/s. Supreme Marbles & Granites Ltd., by overturning the confiscation and redemption fine based on the circumstances presented and the compliance with duty payment requirements.