2015 (6) TMI 782 - AT - Central Excise

Confiscation of goods - Non accountal of goods - Clandestine removal of goods - Held that - duty demand of ₹ 12,58,816/-on 30,23,345 HDPE Caps alleged to have been cleared without payment of duty during period from 1999-2000, 2001-2002, the details about these clearances had been supplied by the appellant company himself. However, their plea is that these HDPE Caps had been manufactured on job work basis out of the Granules supplied by the principal manufacturers and had been returned back to them under job work challans and in this regard they have also enclosed the copies of the job work challans. In our view, once the appellant have submitted the job work challans and job work and job work records the lower authorities should have examined this claim and the same should not have been summarily dismissed. In view of this, this duty demand is not sustainable and the matter has to be remanded to the original adjudicating authority for de novo adjudication on this point. - However, confiscation of 2905 KG HDPE waste, 4050 KG of coloured HDEP Granules and 250 KG of HDEP Granules are set aside - However, confiscation of 7408 pieces and 7670 pieces HDPE caps is sustained - Therefore, penalty and redemption fine is reduced. - Decided partly in favour of assessee.

Summary

Issues:
1. Confiscation of seized goods and duty demand on alleged clearances of HDPE Caps without payment of duty.
2. Appeal against the order of Additional Commissioner.
3. Examination of duty demand and confiscation of various items.

Analysis:
1. The case involved the confiscation of seized goods, including HDPE Containers, Caps, and Granules, along with a duty demand on alleged clearances of HDPE Caps without payment of duty. The appellant contended that the caps were manufactured on a job work basis and had been sent to principal manufacturers under job work challans. The appellant submitted job work challans to support their claim. The tribunal observed that the lower authorities should have examined this claim instead of summarily dismissing it. Consequently, the duty demand was deemed unsustainable, and the matter was remanded for fresh adjudication.

2. The Additional Commissioner had initially ordered the confiscation of seized goods, imposition of redemption fine, penalty, and duty demand on the alleged clearances of HDPE Caps without duty payment. The appellant's plea that the caps were manufactured on job work basis and had been cleared against job work challans was not accepted during the adjudication. The appeal against this order was dismissed by the Commissioner (Appeals), leading to the filing of the present appeal.

3. The tribunal examined the confiscation of various items, including HDPE waste and granules. It accepted the appellant's argument that the HDPE waste was meant for recycling and exempt from duty, setting aside its confiscation. Similarly, the confiscation of unaccounted HDPE granules was deemed unsustainable. However, the confiscation of fully finished HDPE Containers and Caps, which were not accounted for in the RG-1 register, was upheld. The tribunal reduced the redemption fine and penalty while setting aside the duty demand and remanding the matter for fresh adjudication based on the appellant's job work basis claim.