2016 (1) TMI 57 - AT - Central Excise

Confiscation of goods where the duty has been set aside on the ground of period of limitation - Held that - if the entire duty liability has been set aside, confiscation of the goods which are seized from the appellant s premises, does not stand good any more. In view of the fact that demand of duty, holding that the goods were manufactured and liable to duty, has been set aside and as the said order is not unconnected from the impugned order, nothing survives for holding that the goods are liable to confiscation. - Decided in favor of assessee.

Summary

Issues:
Redemption fine imposition on the appellant for purchases made from M/s Interscape; Confiscation of seized goods and the option to redeem them; Challenge of the order-in-original before the Tribunal by M/s Interscape; Setting aside of duty liability by the Tribunal; Validity of confiscation of goods after setting aside duty liability.

Analysis:
The appeal before the Appellate Tribunal CESTAT Mumbai concerns the redemption fine of Rs. 2.25 lakhs imposed on the appellant for purchasing furniture from M/s Interscape and the subsequent confiscation of seized goods. The adjudicating authority had directed the appellant to pay a redemption fine to reclaim the goods. However, it was found that the duty liability was set aside by the Tribunal in a related case involving M/s Interscape. The Tribunal held that demands prior to March 1995 were not sustainable due to limitation issues. Consequently, the duty liability and penalties were set aside in the case of M/s Interscape, which had a direct impact on the present appeal.

The Tribunal noted that since the duty liability was entirely set aside in the case of M/s Interscape, the basis for confiscation of goods from the appellant's premises was no longer valid. The Tribunal reasoned that if the duty liability, which was the foundation for the confiscation, was nullified, then there was no legal ground to uphold the confiscation of the goods. Therefore, the Tribunal concluded that the confiscation ordered in the impugned decision was unsustainable and subsequently set it aside.

In light of the above analysis, the Appellate Tribunal allowed the appeal filed by the appellant, providing them with consequential relief. The judgment highlights the importance of the interconnection between duty liability and confiscation of goods, emphasizing that if the former is invalidated, the latter cannot be upheld. The decision serves as a reminder of the legal principles governing confiscation in cases where duty liability is overturned, ensuring fairness and adherence to procedural requirements in excise matters.