2006 (3) TMI 575 - AT - Central Excise

Summary

Issues: Duty payment on impugned consignments, redemption fine imposition, appeal against duty payment and redemption fine.

In this case, the issue revolved around the duty payment on impugned consignments by M/s. Nagpur Machineries Pvt. Ltd., which was required to be debited in the PLA but was paid through debit in the CENVAT account. The adjudicating authority confirmed a demand of Rs. 48,188 on M/s. Nagpur Machineries, imposed a redemption fine of Rs. 20,000, and directed the clearance of goods on payment of appropriate duty. The appeal against these directions was rejected by the lower appellate authority, leading to the present appeal before the Tribunal.

The appellant argued that since duty was demanded from the manufacturer, they should not be liable to pay duty on redemption of the impugned goods. The appellant cited a Board's Circular stating that action against the consignee to reverse/recover the CENVAT Credit need not be taken as long as the consignee's transaction is bona fide. The Tribunal, after considering the arguments and the circular, concluded that the appellants are not required to pay duty on redemption of the goods. Additionally, since the bona fide nature of the appellant consignee's transaction was not in dispute, the confiscation of goods and imposition of redemption fine were deemed unwarranted. Consequently, the Tribunal set aside the impugned orders related to the appeal of the appellants.

Therefore, the Tribunal allowed the appeal with consequential benefit to the appellants, ruling in favor of the appellant based on the manufacturer's duty payment, the circular's clarification, and the bona fide nature of the consignee's transaction.