2016 (2) TMI 993 - AT - Central Excise

100% EOU - confiscation of goods - clandestine removal - procurement of material form un-registered dealer - Held that - I take notice of the fact that the goods on interception were found by the purchase bill of the appellant and secondly, the goods were being transported with road permit (statutory document, pre authenticated by the Sales Tax Department). Under such circumstances, the genuineness of the transaction is prima facie established as being one of purchase/trade and prima facie no goods of clandestine removal is made out and/or established by the Revenue. Accordingly, I allow all the three appeals and set aside the duty and penalty confirmed in the impugned appellate Order - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
- Clandestine removal of goods
- Confiscation of seized goods and truck
- Duty and penalty imposition

Analysis:

Clandestine removal of goods:
The case involved the interception of a truck carrying Denatured Mentha Oil (DMO) purchased by the appellant from unregistered traders. The appellant failed to provide valid documents supporting the claim that the goods were not produced by them but purchased from the local market. Statements from individuals involved indicated the purchase of goods from unregistered dealers, with discrepancies noted in the documentation. The appellant argued that there was no evidence of clandestine removal and that the goods were being transported based on legitimate purchase documents.

Confiscation of seized goods and truck:
Following the interception, a show cause notice was issued proposing duty levy, confiscation of goods and the truck, along with penalties. The initial order confiscated the seized goods and imposed penalties on the company and individuals involved. However, the Ld. Commissioner (Appeals) set aside the confiscation of goods and truck, citing procedural lapses in issuing the show cause notice beyond the prescribed period. The duty on the goods was confirmed, but the penalties were reduced.

Duty and penalty imposition:
The Tribunal considered the evidence presented, including the purchase bill and road permit, to establish the legitimacy of the transaction. It was noted that the goods were accompanied by statutory documents, indicating a genuine purchase/trade transaction. The Tribunal found no conclusive evidence of clandestine removal and allowed the appeals, setting aside the duty and penalties imposed in the previous orders.

In conclusion, the Tribunal ruled in favor of the appellants, overturning the duty and penalty decisions based on the established legitimacy of the transaction and the lack of evidence supporting clandestine removal.