2016 (3) TMI 1160 - AT - Central Excise

Confiscation - Penalty - Rules 25 and 26 of the CER, 2002 - Held that - I find that in this case the goods which were found without cover on invoice/challans during the investigation have been exported and on verification report has obtained from the Revenue which also certified that goods in question were ultimately exported. Further, I find that there was no mala fide intention of the appellant to defraud the revenue. As there was no mala fide intention of the appellant and the goods are not liable for confiscation, therefore, penalty on both the appellants under Rules 25 and 26 are not imposable - Appeal disposed of.

Summary

Issues involved:
Appeal against duty on scrap, confiscation of goods, penalty imposition.

Analysis:
1. Duty on Scrap: The case involved a demand for duty on scrap due to discrepancies in documents and goods. The appellant did not contest the duty on scrap but sought the benefit of cum-duty price. The tribunal held that the appellant should be given the benefit of cum-duty price as there was no evidence of charging an amount over the sale price, and directed the adjudicating authority to calculate and grant this benefit to the appellant.

2. Confiscation of Goods: The goods in question, including raw material, semi-finished goods, and finished goods, were found without proper documentation during a search. The appellant argued that since the goods were ultimately exported, they should not be liable for confiscation. Relying on a verification report from the Revenue certifying the export of the goods and finding no mala fide intention to defraud the revenue, the tribunal held that the goods were not liable for confiscation, citing the decision of the High Court.

3. Penalty Imposition: The authorities had imposed penalties on both the appellants under Rules 25 and 26 of the Central Excise Rules, 2002. The appellant contended that there was no mala fide intention to evade duty, and penalties should not be imposed. The tribunal, considering the absence of mala fide intention and the non-liability of goods for confiscation, set aside the redemption fine and penalties imposed on both the appellants.

In conclusion, the appeals were disposed of with the appellant being granted the benefit of cum-duty price for scrap, the goods not being liable for confiscation, and the penalties imposed on the appellants being set aside due to the absence of mala fide intention.