2016 (2) TMI 952 - AT - Central Excise

Demand of duty on seized goods - Held that - the seized goods are in the custody of the Revenue and never owned by the appellant, in that circumstances, duty cannot be demanded from the appellant when the appellant themselves have submitted that they are not owner of the goods and they have given explanation thereto that they are selling goods in cash. In that circumstances, I hold that duty demand and imposing of penalty on the appellant is not sustainable. With these terms, the impugned order. Qua demanding duty from the appellant and imposing penalty thereon is set aside - appeal allowed.

Summary

Issues:
Appeal against duty, redemption fine, and penalty imposed on the appellant.

Analysis:
The case involved a seizure of goods at a particular premises, leading to a show cause notice being issued to the appellant and others for demanding duty, confiscation, and penalty. The appellant argued that they were not the owners of the goods seized, even though the goods bore their brand names. They contended that since they sell goods in cash, it was possible that someone else purchased the goods in cash and sent them for transportation. The appellant claimed no connection with the seized goods, which were in the custody of the Revenue. The appellant challenged the duty demand and penalties imposed on them.

During the proceedings, the appellant's counsel reiterated the appellant's position, while the Revenue's representative supported the findings in the impugned order. After hearing both parties and considering the submissions, the Member (J) found that the seized goods were never owned by the appellant and were in the custody of the Revenue. Given this, the duty demand and penalties imposed on the appellant were deemed unsustainable. The Member (J) concluded that since the appellant had clarified that they were not the owners of the goods and explained their cash sales practice, the duty demand and penalty imposition on them could not be upheld. Consequently, the impugned order demanding duty and imposing penalties on the appellant was set aside, and the appeal was allowed.

In summary, the judgment revolved around the appellant's appeal against duty, redemption fine, and penalty imposed on them following a seizure of goods bearing their brand names. The appellant successfully argued that they were not the owners of the seized goods, which were in the Revenue's custody, and that the duty demand and penalties were unjustified due to their cash sales practice and lack of ownership over the goods. As a result, the impugned order demanding duty and penalties was overturned, and the appeal was allowed.