2016 (9) TMI 890 - AT - Central Excise

Confiscation and imposition of penalty - excess found goods as also the Indian currency recovered from the residential premises of the General Manager - Held that - it is found that the law as regards confiscation of excess stock of goods almost stands settled. The same cannot be confiscated on the mere conclusion of non-entry of goods in the statutory documents unless there is evidence that such stock was not entered in RG-1 register either deliberately or on the mala fide intention to remove the same clandestinely. Admittedly in the present case it is not the Revenue s case that the goods were in process of being removed. Apart from the fact that such stock taking process stands challenged by adopting the fact that there is no evidence on record to show that such excess found stock was meant for clandestinely removal in which case action against the assessee was not appropriate. As regards the confiscation of the seized Indian currency I find that the same was seized from the residential premises of the son of General Manager. In spite of the fact that no notice was issued to the person from whose possession the currency was seized to confiscate the currency on the assumption that the same represents the sale proceeds of the goods cleared and sold by the manufacturing unit without there being any evidence to that effect and without there being any duty demand in respect of such clandestinely removed goods is neither proper nor justifiable. It is well settled law that onus to prove that currency in question represents sale proceeds of clandestinely removed goods lies heavily on the Revenue and is required to be discharged with sufficient evidence . In the instant case I find that there is nothing on record to show that cash seized from the residential premises of the General Manager of the company represent sales proceeds of the clandestinely removed goods from the appellant factory. Therefore the confiscation of goods as also cash seized or imposition of penalty upon the appellant by the authorities below are set aside. - Decided in favour of appellant with consequential relief

Summary

Issues involved:
Confiscation of excess found goods, Confiscation of seized Indian currency, Imposition of penalty.

Confiscation of excess found goods:
The appellant contested the excess stock of sponge iron found during a verification visit, arguing that the stock measurement method was incorrect and there was no evidence of deliberate non-entry in records for clandestine removal. The Tribunal referred to previous decisions where mere excess stock cannot lead to confiscation without evidence of intent for clandestine removal. Lack of proper stock taking was also highlighted as a reason for not upholding confiscation. The Tribunal ruled in favor of the appellant, setting aside the confiscation of excess goods.

Confiscation of seized Indian currency:
The cash seized from the residential premises of the General Manager was proposed for confiscation as sale proceeds of clandestinely removed goods. However, the Tribunal found no evidence linking the cash to such activities. It emphasized that the burden of proof lies on the Revenue to establish the currency's origin, which was not done in this case. Citing relevant case law, the Tribunal concluded that the confiscation of the currency was unjustified. The Tribunal set aside the confiscation of the cash.

Imposition of penalty:
The adjudicating authority had imposed a penalty on the appellant, which was upheld by the Commissioner (Appeals). However, the Tribunal, after considering the arguments presented, found no valid reason to uphold the penalty. Consequently, the Tribunal allowed the appeal, overturning the penalty imposed on the appellant.