2015 (4) TMI 957 - AT - Central Excise

Confiscation of seized goods - Imposition of redemption fine and penalty - Held that - On physical verification of the goods, they were contained 52 pallets and 85 cardboard cartons (duly packed containing Tractor parts and forgings etc.) which were lying unaccounted in the factory premises of the appellant and were in fully finished condition. The contention of the appellant that merely non accountal of the goods in the statutory records does not lead for confiscation of the goods, unless there is malafide intention on the part of the appellant is proved. In this case, if the preventive staff did not visit the factory premises of the appellant, these fully finished goods would have been cleared by the appellant clandestinely. Therefore, this clearly shows that these seized goods are ready to clear clandestinely without payment of duty. In these circumstances, I hold that the goods are liable for confiscation and consequently redemption fine and penalty are imposable. Further, I find that the goods were meant for export. In that situation, redemption fine and penalty are excessive and are harsh, therefore, reduced - Decided partly in favour of assessee.

Summary

Issues:
1. Confiscation of unaccounted goods in factory premises.
2. Allegation of clandestine removal without duty payment.
3. Consideration of malafide intent for confiscation.
4. Assessment of redemption fine and penalty imposition.
5. Goods meant for export and impact on penalty.

Analysis:
The case involved an appeal against an impugned order regarding the confiscation of goods found unaccounted in the factory premises of the appellant. The Preventive Staff of Central Excise, upon visiting the premises, discovered fully finished goods packed for export, valued at &8377; 40,39,532, with a duty liability of &8377; 3,32,857. The goods were seized as they were not recorded in the statutory RG-1 register, and pre-dated 'OK stickers' were found on the pallets/boxes. The appellant argued that mere non-accountal in records should not lead to confiscation without malafide intent. However, the Revenue contended that the goods were ready for clandestine removal without duty payment.

Upon review, the tribunal found that the goods, if not intercepted, would have been cleared clandestinely. This indicated a potential intent to evade duty payment, justifying confiscation. The tribunal emphasized that the seized goods were fully finished and ready for clandestine clearance, leading to the decision that confiscation, redemption fine, and penalty were warranted. However, considering the goods were meant for export, the tribunal deemed the redemption fine and penalty excessive and reduced them to &8377; 1 lakh and &8377; 50,000, respectively.

In conclusion, the appeal was disposed of with the decision to uphold the confiscation of goods due to the potential for clandestine removal without duty payment. The reduction in redemption fine and penalty was based on the goods' intended export status, aiming to balance enforcement with fairness in the penalty imposition.