2012 (6) TMI 736 - AT - Central Excise

Confiscation of goods under Rule 25 of the Central Excise Rules - Interception of trucks - Non production of proper documents - Held that - investigating officers have not been able to identify the factory from which the goods were cleared without payment of duty. The appellants before me are neither a transporter registered dealer or owner of a warehouse. Therefore the goods cannot be confiscated in the hands of the appellants as per the provisions of Rule 25 of Central Excise Rules. If the goods cannot be confiscated under Rule 25 penalties imposed under Rule 26 are also not sustainable. So is the confiscation of the vehicles which were seized for the reason that they were carrying non-duty paid goods is also not maintainable. So the question of redemption fine for the goods or the vehicle does not arise - Decided in favour of assessee.

Summary

Issues:
- Confiscation of goods under Rule 25 of Central Excise Rules
- Imposition of penalty under Rule 26
- Confiscation of vehicles carrying non-duty paid goods

Confiscation of goods under Rule 25 of Central Excise Rules:
The case involved the seizure of goods belonging to a trader, where the main appellant was the proprietor of the trading entity. The Revenue claimed that the goods seized were excisable goods on which excise duty had not been paid. The investigation revealed discrepancies in the documents provided by the trader, leading to a show cause notice for confiscation of goods under Rule 25 of the Central Excise Rules. The Counsel for the appellant argued that Rule 25 applies only to specific categories of individuals, such as producers, manufacturers, or registered dealers, none of which included the appellants. The Tribunal found that since the appellants did not fall within the categories specified under Rule 25, the confiscation of goods under this rule was without legal authority.

Imposition of penalty under Rule 26:
Regarding the imposition of penalties under Rule 26, the Counsel for the appellant contended that penalties could only be applied if the goods were liable to confiscation under the Act or Rules. As the goods could not be confiscated under Rule 25, the Counsel argued that penalties under Rule 26 were not justified. The Tribunal agreed with this argument, stating that if goods could not be confiscated under Rule 25, penalties imposed under Rule 26 would also not be sustainable.

Confiscation of vehicles carrying non-duty paid goods:
The Revenue highlighted that even after 15 days of seizure, no proper duty-paying documents were produced by the transporters or the alleged owner of the goods. The Tribunal noted that the investigating officers failed to identify the factory from which the goods were cleared without duty payment. It was observed that the appellants were not transporters, registered dealers, or warehouse owners, and therefore, the confiscation of goods under Rule 25 did not apply to them. Consequently, the Tribunal ruled that the confiscation of vehicles carrying non-duty paid goods was also not maintainable. The decision was made to set aside the impugned order and allow the appeals with any consequential reliefs.

In conclusion, the Tribunal found that the confiscation of goods, imposition of penalties, and confiscation of vehicles were not legally sustainable under the Central Excise Rules. The judgment provided relief to the appellants based on the lack of legal authority for the actions taken by the Revenue, ultimately setting aside the impugned order and allowing the appeals with any consequential reliefs.