2012 (12) TMI 263 - AT - Central Excise

Demand of differential duty - Confiscation of seized goods alleged that Stereo Cassette Players received from Delhi without cover of invoices and without payment of duty which were not accounted for in the statutory records by the respondents Held that - Revenue is not contesting the fact that confiscation of the goods seized in the hands of current respondent or in the hands of suppliers of the goods in Delhi. Since the goods have held to be not liable for confiscation - demand of differential duty not sustainable

Summary

Issues:
- Appeal against setting aside the demand of differential duty
- Interpretation of the correlation between setting aside confiscation and differential duty
- Dispute over the sustainability of the demand of Rs. 48,138 differential duty

Analysis:
1. The appeal was made against the setting aside of the demand of differential duty. The Revenue contested the Commissioner (Appeals) observation regarding the correlation between the setting aside of confiscation and the differential duty of Rs. 48,138. The Revenue argued that the Commissioner wrongly related the two aspects, emphasizing that the duty was a short payment towards the total duty liability on the clearance of seized goods. The adjudicating authorities in Delhi had previously determined that duty was not required to be paid on the seized goods supplied in CKD condition.

2. The first appellate authority found that the differential duty was not sustainable due to the circumstances surrounding the seized goods. The authority noted that the goods were received without proper documentation and duty payment, leading to their seizure and subsequent provisional release. Since the Revenue did not dispute the setting aside of confiscation of the seized goods, the authority concluded that the demand for the differential duty was also not justifiable based on the facts presented.

3. The Tribunal upheld the decision of the first appellate authority, stating that the Revenue did not contest the status of the confiscated goods either in the hands of the current respondent or the suppliers in Delhi. As the confiscation was deemed unwarranted, the Tribunal concurred with the authority's ruling that the demand for the differential duty of Rs. 48,138 was not sustainable. Therefore, the appeal filed by the Revenue was rejected, and the impugned order was upheld.

In conclusion, the judgment focused on the proper interpretation of the correlation between setting aside confiscation and the demand of differential duty. The decision highlighted the importance of factual findings and legal correctness in determining the sustainability of duty demands in cases involving seized goods and duty liabilities.