2016 (1) TMI 339 - AT - Central Excise

Confiscation of the seized goods and currency - Denial of provisional release of Cash - Held that - the provisional release of the currency is sought by the appellant only to discharge the demanded duty liability along with interest so that their case can be settled by the Settlement Commission. We find that realizing the full admitted duty liability along with interest is in the interest of the Revenue. The appellant vide their letter dated 17.06.2014 and again letter dated 7.4.2014 addressed to the jurisdictional Commissioner sought for appropriation and adjustment of the seized cash towards demand of duty and applicable interest. Even before the Hon ble High Court, they have pleaded that they required the seized cash to be provisionally released to discharge duty liability with interest in this case so that they can approach again to the Settlement Commission for settling the case. Thus, in fact, release of the amount for payment of duty for settling the case would only safeguard the interest of Revenue. Appellant is eligible for provisional release of the cash seized on similar terms already considered by the Revenue while releasing the seized goods - Appeal disposed of.

Summary

Issues:
1. Provisional release of seized currency under Central Excise Act, 1944.
2. Applicability of Section 110 A of the Customs Act, 1962 to central excise.
3. Rejection of appellant's request for release of seized currency.
4. Legal basis for different treatment of seized currency as sale proceeds.
5. Safeguarding the interest of the Revenue in the case.

Analysis:

Issue 1: Provisional release of seized currency under Central Excise Act, 1944
The case involved the seizure of goods and currency by central excise officers from the appellant, a manufacturer of automobile parts. The appellant sought provisional release of the seized currency, which was refused by the Commissioner citing the lack of provision under the Central Excise Act, 1944. However, the Tribunal found the Commissioner's decision erroneous, emphasizing that the seizure of currency was made under Section 110 of the Customs Act, 1962, which includes currency as "goods." The Tribunal noted that the power to seize goods also includes the power to provisionally release them, as per the Central Excise Manual guidelines. Therefore, the Tribunal held that the appellant was eligible for the provisional release of the seized currency.

Issue 2: Applicability of Section 110 A of the Customs Act, 1962 to central excise
The Tribunal addressed the argument regarding the applicability of Section 110 A of the Customs Act, 1962 to central excise. The authorized representative reiterated that this provision was not applicable to central excise, supporting the Commissioner's decision. However, the Tribunal found this argument unconvincing, emphasizing that the seizure of currency under Section 110 of the Customs Act, 1962 was valid and that the definition of "goods" in the Customs Act includes currency. Therefore, the Tribunal concluded that the provisions of the Customs Act applied to the seizure of currency in the present case.

Issue 3: Rejection of appellant's request for release of seized currency
The appellant's request for the release of the seized currency was initially rejected by the Commissioner, leading to the filing of an appeal. The Tribunal reviewed the Commissioner's decision and found it legally unsustainable. The Tribunal highlighted that the appellant's request for provisional release of the currency was in line with the procedures followed for the release of seized goods in the same case. The Tribunal emphasized that the release of the currency would enable the appellant to discharge the demanded duty liability and settle the case, ultimately safeguarding the interest of the Revenue.

Issue 4: Legal basis for different treatment of seized currency as sale proceeds
The Tribunal scrutinized the Commissioner's reasoning for treating the seized currency differently as sale proceeds of non-duty paid goods. The Tribunal found no legal basis for this differential treatment, especially considering the procedural guidelines outlined in the Central Excise Manual. The Tribunal emphasized that the power to provisionally release seized goods should also apply to seized currency, as both are integral parts of the same case.

Issue 5: Safeguarding the interest of the Revenue in the case
In evaluating the impact of releasing the seized currency on the Revenue's interest, the Tribunal noted that the appellant intended to use the released amount to pay the demanded duty liability and interest. This action, the Tribunal concluded, would be in the interest of the Revenue, as it would facilitate the settlement of the case. The Tribunal highlighted that the appellant's request for the provisional release of the currency was aimed at fulfilling their duty obligations, ultimately benefiting the Revenue.

In conclusion, the Tribunal ruled in favor of the appellant, ordering the provisional release of the seized currency on similar terms as the released goods, and disposed of the appeal in accordance with the legal analysis provided.