2019 (3) TMI 1790 - AT - Central Excise

SSI exemption - Clandestine Removal - case of Revenue is that if such clandestinely removed goods are added in the value of clearances of M/s Kanpur Plast Industries, the same would increase the total clearances available in terms of SSI exemption - HELD THAT - In the present case the Revenue has seized and finally confiscated the seized goods on the sole ground that they were removed clandestinely by M/s Kanpur Plast Industries and if the value of the same is included in the clearance value of M/s Kanpur Plast they would have crossed the exemption limit. There is no justification to confiscate the goods or to impose penalty upon the present appellant - Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Denial of benefit of Small Scale Exemption Notification
2. Confiscation of goods and imposition of penalty

Analysis:
Issue 1: Denial of benefit of Small Scale Exemption Notification
The case involved M/s Kanpur Plast Industries engaged in manufacturing plastic furniture under the Small Scale Exemption Notification. The Central Excise Officers conducted checks at the premises of both the manufacturing unit and the trading unit, suspecting clandestine removal of goods. The Revenue alleged that goods found in the trading unit were manufactured by the manufacturing unit and removed clandestinely. Proceedings were initiated against the appellant, leading to a show cause notice proposing denial of the exemption benefit. The Commissioner (Appeals) held that the seized goods from the trading unit cannot be considered clandestinely removed goods by the manufacturing unit. Consequently, the benefit of the Small Scale Exemption Notification was not denied, and the duty confirmed against the manufacturing unit was set aside.

Issue 2: Confiscation of goods and imposition of penalty
Simultaneously, another show cause notice was issued proposing confiscation of goods and penalties. The Original Adjudicating Authority and Commissioner (Appeals) confirmed the confiscation of goods with an option for redemption on payment of a fine. However, the Tribunal noted that the issue of clandestine removal by the manufacturing unit had already been decided by the Commissioner (Appeals) in a related case involving the same assessee. As the issue had attained finality, the Tribunal found no justification for confiscating the goods or imposing penalties on the appellant. Therefore, the impugned orders were set aside, and all three appeals were allowed with consequential relief.

This comprehensive analysis of the judgment highlights the key issues of denial of exemption benefit and confiscation of goods, detailing the findings and decisions made by the authorities and the Tribunal in each aspect of the case.