2006 (8) TMI 417 - AT - Central Excise

Summary

Issues:
Confiscation of goods seized from premises and cleared with an option to pay redemption fine.

Analysis:
The judgment revolves around the challenge to the confiscation of goods seized from the premises of a company and cleared through another company, with the option for the appellant to pay a redemption fine. The goods were cleared by a different company under original gate passes indicating full duty payment, which were found in the possession of the appellant's company. Discrepancies were discovered upon comparing the original gate passes with duplicate and triplicate copies, revealing that the duty payments shown on the original passes were not actually made. The appellant claimed to have received the goods under the original gate passes, believing that the duty was appropriately paid and even reimbursed the duty amount to the manufacturer. The appellant argued that they were unaware of the manufacturer's fraudulent activities, making the confiscation unjustified.

The respondent contended that although no penalty was imposed on the appellant, the goods were rightfully deemed liable for confiscation under Rule 173Q(1) due to the absence of duty payment as indicated on the original gate passes. The respondent emphasized that the appellant's intention was irrelevant in the context of confiscation.

Considering Rule 173Q(1), which stipulates that goods removed in violation of the law are subject to confiscation, even if the duty was not paid, the goods cleared without duty payment are liable for confiscation. However, acknowledging that the appellant was unaware of the duty evasion and was not complicit in the manufacturer's fraud, and had paid the correct duty amount to the manufacturer, the redemption fine was reduced significantly to a nominal sum of Rs 5000. The judgment concluded by disposing of the appeal accordingly.