2015 (10) TMI 1646 - AT - Central Excise

Confiscation of goods - Imposition of redemption fine - Held that - It is admitted fact that the production capacity of the appellant was not so much so as to get registration after crossing SSI exemption limit. In these circumstances, the burden casts on the Revenue to prove that the appellant has crossed the limit and that they were clearing the goods clandestinely. As discussed above, the production capacity of the appellant by all means is remained below the SSI exemption limit, therefore the goods were not required to be seized and consequently confiscated. In these terms, I set aside the order of confiscation, demanding duty and imposing penalty on the appellant. - Decided in favour of assessee.

Summary

Issues:
Appeal against impugned order confiscating goods, redemption fine, duty, and penalties imposition under Central Excise Rules.

Analysis:
The appellant appealed against an order where goods were confiscated and allowed redemption on payment of fine, duty, and penalties. The appellant began wire drawing activity in December 2010, with an investigation in March 2011 due to alleged improper record-keeping and clearance on kachcha slips. The appellant argued that their turnover did not exceed the SSI exemption limit of Rs. 1.5 crores by March 2011, justifying exemption under Notification No. 8/2003. They referenced a Tribunal decision in Shanti Fasteners case for support. The appellant contended that due to low production, they did not register with the Central Excise department, hence the seizure was unnecessary. The AR, however, supported the Commissioner (Appeals) findings, emphasizing the necessity of maintaining records even under SSI exemption.

The Tribunal noted that the appellant's production capacity did not surpass the SSI exemption limit, shifting the burden to the Revenue to prove clandestine clearance. As the appellant's production remained below the limit, the goods were not required to be seized or confiscated. Consequently, the order of confiscation, duty demand, and penalty imposition were set aside, and the appeal was allowed with any consequential relief.

This judgment highlights the importance of maintaining proper records even under SSI exemption and the burden on Revenue to prove exceeding limits for seizure. The decision provides clarity on the circumstances justifying confiscation and emphasizes the need for evidence in proving clandestine activities. The reference to past Tribunal and High Court decisions adds legal weight to the appellant's argument, showcasing the reliance on precedent in such cases.