2006 (9) TMI 324 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods stored outside factory premises without following conditions of Trade Notice.
2. Bond acceptance and permission granted by the Commissioner.
3. Appellant's compliance with procedures for storing goods outside factory premises.

Analysis:
1. The appeal was against an Order-in-Appeal confirming duty, confiscation, and penalty but reducing redemption fine. The appellant, a sugar manufacturer, sought permission to store non-duty paid sugar outside the factory as per a trade notice. Despite following procedures and submitting a bond with guarantee, goods were confiscated, and penalty imposed. The Commissioner (Appeals) set aside duty demand, reduced fine/penalty, but upheld confiscation.

2. The appellant's representative highlighted the delay in obtaining permission to store sugar outside the factory. The Deputy Commissioner accepted the bond for storage, as per the permission granted by the Commissioner. The appellant, facing a storage dilemma, stored sugar outside the factory after permission and bond execution. The Department's issuance of a show cause notice post-bond acceptance was contested by the appellant.

3. The Tribunal noted the common practice of storing sugar outside during production seasons with proper permissions. The appellant's compliance with procedures, including bond execution and intimation to authorities, was evident. The Deputy Commissioner's acceptance of the bond aligned with the trade notice conditions. The Tribunal emphasized that the appellant followed the prescribed procedures for storing goods outside the factory premises.

4. The Trade Notice conditions, particularly regarding bond execution and security, were crucial for revenue protection. The appellant's adherence to these conditions, post obtaining permission, was deemed satisfactory. The Tribunal concluded that the confiscation of goods was unwarranted as the appellant had fulfilled the necessary requirements for storing goods outside the factory premises.

5. In light of the appellant's compliance with procedures, the Tribunal set aside the Order-in-Appeal, allowing the appeal. The confiscation and penalty imposed were deemed unjustified given the appellant's adherence to the prescribed guidelines post obtaining permission. The Tribunal emphasized the importance of following procedures and permissions granted by the competent authority in such cases.