2008 (7) TMI 748 - AT - Central Excise

Summary

Issues: Whether goods can be confiscated and redemption fine imposed even if they are not available for confiscation.

Analysis:
The appellants admitted liability to pay duty for goods allegedly clandestinely removed, leading to the imposition of a penalty. However, investigations revealed that the goods were cleared and not available for seizure during or after investigations. Despite this, the goods were confiscated, and a redemption fine was levied. The appellant argued that since the goods were never available for confiscation or seizure, a redemption fine should not have been imposed. The appellant cited precedents where it was held that redemption fine cannot be imposed if goods are not available for confiscation. On the other hand, the Commissioner (Appeals) relied on conflicting decisions where goods were confiscated even if not available for confiscation. The Tribunal noted the conflicting decisions and referred the matter to a Larger Bench to decide whether goods can be confiscated and a redemption fine imposed when they are not available for confiscation.

The Tribunal observed that once goods are not available for confiscation, excluding cases where goods are initially seized but released under bond, they cannot be confiscated, and a fine in lieu of confiscation cannot be imposed. The reliance on certain decisions by the Commissioner (Appeals) was deemed misplaced as they only dealt with liability to confiscation, not actual confiscation and imposition of a redemption fine. Conflicting views were noted, with one decision suggesting that goods can be confiscated and a redemption fine imposed even if not available for confiscation. Due to these conflicting decisions, the matter was referred to a Larger Bench for a decision on whether goods can be confiscated and a redemption fine imposed when they are not available for confiscation.