2016 (9) TMI 421 - AT - Central Excise

Demand and confiscation - excisable goods seized in the factory premises and in the depot and godown premises of various traders - found in excess of the stock recorded in their daily stock account - Appellant contended that inasmuch as the order in the main case of evasion against the appellant has been set-aside by the Tribunal, the present proceedings should also be set-aside inasmuch as it has been held in the other proceedings that the allegation of clandestine manufacture and removal of goods is not sustainable. Held that - the fact that this Tribunal has set-aside the order of confirming the demand on the allegation of clandestine removal, it would not be proper to consider this unaccounted stock as intended to be removed without payment of duty. Hence, we set-aside the confiscation of the seized goods valued at ₹ 35,730/-. Packing material and perfumery items totally valued at ₹ 10,41,892/- has been seized from the resident of Sh. Varun Gupta, Partner of the appellant, for the reason that these goods have not been accounted in the statutory records. Various quantity of gutka have also been seized from the godown of dealers/ traders under the belief that these goods have been cleared clandestinely without payment of duty from the factory of the appellant. Inasmuch as the entire proceedings initiated by the Revenue separately to establish clandestine clearance and demand of duty stands set aside by this Tribunal, we are inclined to take the view that seizure of these goods is not sustainable and hence the same is set-aside. Consequently, the proceedings for imposition of personal penalty on the concerned persons of the various traders also is liable to be set aside. - Decided in favour of appellant

Summary

Issues:
1. Allegation of clandestine clearance and non-payment of duty against the appellant and others.
2. Confiscation of goods seized at various premises.
3. Appeal against the impugned order of Commissioner (Appeals) dated 20.06.2008.

Detailed Analysis:

1. The judgment involves an appeal against an order passed by the Commissioner (Appeals) regarding the investigation conducted by the Directorate General of Central Excise Intelligence (DGCEI) against the appellant, a manufacturer of branded pan masala containing tobacco. The investigation included a search of various premises, leading to the seizure of gutka and other items. A show cause notice was issued demanding duty payment and imposing penalties. The original authority confirmed the demands, leading to the impugned order dated 20.06.2008. However, a separate investigation by DGCEI regarding clandestine clearance and non-payment of duty resulted in an order-in-original demanding a significant amount from various parties, including the appellant. The Tribunal set aside this order, finding the allegations unsustainable.

2. The appeal in question pertains to the demand and confiscation of goods seized at various premises on 07.10.2004. The appellant argued that since the Tribunal had already set aside the order related to clandestine removal in a separate case, the present proceedings should also be set aside. Goods valued at ?35,730 were seized from the factory premises for being in excess of recorded stock. The appellant contended that these goods were to be accounted for at the end of the day, but the authorities ordered confiscation and imposed fines. Given the Tribunal's decision on the clandestine removal allegation, the confiscation of these goods was set aside.

3. Additionally, packing material and perfumery items valued at ?10,41,892 were seized from a partner of the appellant, and gutka was seized from traders' premises. However, since the Tribunal had already set aside the proceedings related to clandestine clearance and duty demand, the seizure of these goods was deemed unsustainable. Consequently, the proceedings for imposing personal penalties on the traders were also set aside. The Tribunal decided to set aside the confiscation of seized goods and penalties based on the findings in related proceedings.