2012 (10) TMI 691 - AT - Central Excise

Confiscation - imposition of redemption - default in payment of duty - which was paid subsequently Held that - Confiscation of goods would mean that propriety of the goods shall rest with the Government and therefore if goods for confiscation are not available, redemption fine in lieu of confiscation cannot be imposed. - The natural conclusion that emerges is that if the fine is paid, the goods have to be returned. - it is nobody s case that if the respondent pays Rs. 1 lakh, the goods will be returned by the Revenue. - No doubt, if the goods have been seized and released provisionally after execution of bond confiscation order can be made and fine can be imposed but not otherwise. confiscation and redemption fine set aside

Summary

Issues: Default in payment of duty leading to confiscation of goods and imposition of redemption fine.

Default in payment of duty and confiscation of goods:
The case involves a default in payment of duty during November 2007, which was later paid in April/May 2009 with interest. The Revenue appealed against the decision that set aside the order of confiscation made by the original adjudicating authority and the imposition of a redemption fine of Rs. 1 lakh. The appeal was based on Rule 25 of the Central Excise Rules, 2002, which provides for confiscation of goods in case of default in payment of duty. The Rule states that goods shall be deemed to have been cleared without payment of duty in case of default, making them liable to confiscation as per Rule 25. The question raised was whether confiscation can be ordered when goods are already cleared but considered clandestinely removed due to default and delay in payment of duty. The judgment highlighted that confiscation of goods would transfer their ownership to the Government, and if goods for confiscation are not available, a redemption fine cannot be imposed. It was concluded that if the fine is paid, the goods must be returned. The judgment referenced the decision of a Larger Bench of the Tribunal in a similar case, supporting the view that confiscation and imposition of fine are only applicable when goods have been seized and released provisionally after execution of a bond.

Decision and Conclusion:
The judge, after considering the arguments and legal provisions, found no merit in the appeal and rejected it. The judgment emphasized that in cases where goods have not been seized and released provisionally after a bond execution, confiscation and imposition of a fine cannot be justified. The ruling underscored the principle that if the fine is paid, the goods must be returned. The decision was based on the interpretation of relevant rules and legal precedents, ensuring that confiscation and fines are imposed only in specific circumstances as outlined by the law.