2015 (10) TMI 1251 - AT - Central Excise

Confiscation of goods - Clandestine removal of goods - Imposition of redemption fine and penalty - Held that - Facts which are coming in my knowledge is that appellant is manufacturer of bushes and it is the contention of the appellant that their daily production is about 9000 to 10000 pieces of bushes per day. From the records, it is not clear that how much is the production of the appellant per day and the contention of the appellant that they are manufacturing 9000 to 10000 pieces of bushes has not been contraverted by the Revenue with any cogent evidence. In the absence of any cogent evidence, the allegation is merely based on assumption and presumption and that excess stock found is meant for clandestine removal. Infact charge of clandestine removal is serious charge.It should be supported by some evidence which is absent in this case whereas the appellant has taken a defense that they are manufacturing 9000 to 10000 pieces per day and they are entering the quantity manufactured in a day at the end of the day. In these circumstances, without ascertaining the production of the day, from the records, the demand against the appellant is not sustainable. Hence goods are not liable for confiscation and thus question of imposition of redemption fine and penalty does not arise. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Imposition of redemption fine and penalty on the appellant for excess stock found in their factory meant for clandestine removal.

Analysis:
The appellant appealed against the imposition of redemption fine and penalty based on the excess stock found in their factory, allegedly meant for clandestine removal. During a visit to the factory premises, discrepancies were noted in the stock count, with a significant excess of pieces of bushes compared to the stock register. The authorities alleged that the excess stock was intended for clandestine removal, leading to the confiscation of the goods and the imposition of fines and penalties. The appellant contended that their daily production of bushes ranged from 9000 to 10000 pieces, a claim not disproved by the Revenue with substantial evidence. The absence of concrete evidence to support the charge of clandestine removal rendered the allegation based on assumption and presumption. The appellant maintained that they recorded the daily production accurately, and without verifying the daily production figures, the demand against the appellant was deemed unsustainable. Consequently, the goods were held not liable for confiscation, and the question of imposing redemption fine and penalty did not hold ground.

The appellate tribunal, after reviewing the submissions and records, concluded that the lack of substantial evidence supporting the charge of clandestine removal undermined the case against the appellant. The tribunal emphasized the seriousness of the charge and the necessity for evidence to substantiate such allegations. Given the appellant's consistent claim regarding their daily production figures and the absence of contradictory evidence, the tribunal found the demand unsustainable. As a result, the tribunal set aside the impugned order, allowing the appeal and providing consequential relief, if applicable.