2010 (7) TMI 347 - AT - Central Excise

Confiscation and penalty removal of goods without payment of Central Excise duty - As per Rule 6 of the Central Excise Rules, 2002, Central Excise invoice is to be prepared at the time of removal of the goods. In this case no goods were removed from the factory at all as admitted by parties - confiscation has been confirmed in this case only on the basis of statement co-accused and no cross examination was given - non-accountal of the stock in the statutory record explained - statutory record is to be made at the end of the day, there was no entry of the stock manufactured - no investigation made to the job worker or the customer to corroborate the clandestine removal of the goods - goods are to be removed without payment of Central Excise duty not acceptable - To prove clandestine removal of the goods, Revenue has to establish through corroborative evidence but not by mere statement for which no cross-examination allowed

Issues:
Reduction of redemption fine on flexible printed laminated films, reduction of redemption fine on truck, setting aside the confiscation of Hologram machine, reduction of penalty under Rule 25 of the Central Excise Rules, 2002.

Analysis:
1. The Commissioner (Appeals) reduced the redemption fine on flexible printed laminated films and truck, along with setting aside the confiscation of the Hologram machine. The penalty under Rule 25 of the Central Excise Rules, 2002, was also reduced from Rs. 1,00,000 to Rs. 25,000. The Revenue appealed against the reduction in the redemption fine, penalty, and the setting aside of the confiscation of the Hologram Machine.

2. The assessee (M/s. ALL) filed an appeal against the confiscation of flexible printed laminated films and the truck, along with the penalty imposed. The search operation conducted at the premises of M/s. ALL revealed goods like a truck, flexible printed laminated films, and a Hologram machine. A show cause notice was issued for their confiscation and penalties.

3. The learned Advocate argued that the confiscation of goods and the truck was unwarranted as there was no contravention of the Central Excise Rules. The goods were in the semi-finished state and were being taken for further processing. No evidence supported the charge of clandestine removal, and the lack of stock entry in the daily account was due to the timing of the search. The Hologram machine was not subject to confiscation as no Cenvat credit was taken.

4. The Revenue contended that the goods were being removed without proper documentation, indicating clandestine removal. They argued for the imposition of penalties and against the reduction of redemption fines and setting aside of confiscation.

5. The Tribunal examined the submissions and found that no goods were actually removed from the factory, as confirmed by both parties. The confiscation was solely based on the statement of a co-accused without allowing cross-examination. Lack of stock entry was explained, and no corroborative evidence was presented for clandestine removal.

6. Regarding the Hologram machine, it was acknowledged that no duty paid document was available, but since no Cenvat credit was taken, confiscation was not warranted. The Tribunal held that the charge of clandestine removal was not sustainable, and the confiscation of goods and the truck was unjustified. The setting aside of the Hologram machine confiscation was upheld.

7. Consequently, the Tribunal set aside the confirmation of the confiscation of flexible printed laminated film and the truck, along with the penalty imposition. However, the setting aside of the Hologram machine confiscation was upheld. Both appeals by the Revenue and M/s. ALL were disposed of accordingly.

← Previous Next →