2010 (6) TMI 534 - AT - Central Excise

Confiscation - Provisionally released on execution of a bond and security by M/s. Radha Enterprises - Demand - The evidence on record especially the statements of drivers of the trucks which carried the goods on different dates clearly point to removal of goods from M/s. Amar Food Products without preparing excise invoices and without payment of duty - show cause notice has been issued on 7-4-98 much after the date of provisional release of the goods that is 28-9-97 - The role of M/s. Radha Enterprises in abetting the unaccounted clearances by M/s. Amar Food Products is evident from the seizure of the goods from the trucks on three different dates coming from M/s. Amar Foods Products with the invoices of M/s. Radha Enterprises as clearly admitted by the drivers - Therefore, the penalty on them is justified - Decided against the assessee

Summary

Issues:
Appeal against order of Commissioner (Appeals) regarding confiscation of goods, imposition of fine, and penalty on M/s. Amar Food Products and M/s. Radha Enterprises.

Analysis:
1. Confiscation of Goods:
The case involves the confiscation of goods valued at Rs. 10,90,950/- under Rule 173Q due to unaccounted clearances. The Commissioner (Appeals) upheld the confiscation but questioned the ownership of the goods by M/s. Radha Enterprises, concluding it was a front for M/s. Amar Food Products. However, the Appellate Tribunal found that no show cause notice proposing confiscation was issued to M/s. Radha Enterprises, rendering the confiscation without proper procedure invalid.

2. Imposition of Fine and Penalty on M/s. Amar Food Products:
The original authority imposed a fine of Rs. 6 lakhs and a penalty of Rs. 5 lakhs on M/s. Amar Food Products. The Commissioner (Appeals) reduced the penalty amount but upheld the demand of Rs. 3,27,159/-. The Appellate Tribunal acknowledged the duty liability but found the penalty excessive, reducing it to match the duty amount. The Tribunal set aside the fine in lieu of confiscation due to the invalid confiscation process.

3. Penalty on M/s. Radha Enterprises:
M/s. Radha Enterprises faced a penalty of Rs. 1,10,000/- for abetting unaccounted clearances by M/s. Amar Food Products. The Tribunal upheld this penalty, considering the evidence from the intercepted trucks and the involvement of M/s. Radha Enterprises in the scheme.

4. Final Decision:
The Tribunal rejected the appeal regarding the penalty on M/s. Radha Enterprises. For M/s. Amar Food Products, the demand of duty was upheld, the fine in lieu of confiscation was set aside, and the penalty was reduced to Rs. 3,27,159/-. The Tribunal emphasized the importance of following proper procedures in confiscation cases and ensuring penalties are proportionate to the violations.