2007 (3) TMI 462 - AT - Central Excise

Summary

Issues involved: Confiscation of goods procured from a manufacturer accused of duty evasion.

Summary:
The Appellate Tribunal CESTAT, Mumbai heard the case where the appellant challenged the confiscation of a Spectrometer purchased from a manufacturer accused of using parallel invoices to evade duty. The appellant contended that they were not aware of the fraud committed by the manufacturer and should not be penalized for it.

The Tribunal referred to a previous decision in the case of Nucor Wires Ltd. v. Commissioner of Central Excise, highlighting the liability for confiscation under Rule 173Q(1)(a) as an action in rem, arising from the manufacturer's activities. It was emphasized that the liability of confiscation on a manufacturer is continuous until the goods are delivered to an independent buyer with full consideration paid towards duty. Any handling of goods post-change of ownership shifts the confiscation liability to Rule 209, not Rule 173Q(1)(a).

Considering the lack of evidence or allegations regarding the appellant's knowledge of the non-duty paid goods, the Tribunal found no justifiable reason to uphold the confiscation. Therefore, the confiscation of the goods was set aside, and the appeal was allowed accordingly.