2017 (12) TMI 375 - AT - Central Excise

Non-sustainability of seizure and confiscation of paper sheets - case of appellant is that the paper sheets as a product not manufactured by the appellant. These are raw materials received under challan for job work and further process - Held that - The products were neither identified by their classification or excisability, after due manufacture. The possibility of the product being semi-processed intended for further use in manufacture of final product which are excisable can be no basis to confiscation of the said goods - Since, there is no categorical finding regarding the offence with reference to impugned goods or whether they are at any stage excisable product, the impugned order cannot be sustained. Penalty on Manager of the main appellant s unit - Held that - As the penalty has been imposed by Original Authority under Rule 25 which was never invoked or alleged in the notice, the impugned order could not have revised or reduced the same by applying Rule 26 - penalty set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues: Seizure and confiscation of paper sheets, Penalty imposed on the Manager

Seizure and Confiscation of Paper Sheets:
The main appeal before the Appellate Tribunal was against the order dated 12/06/2015 regarding the non-sustainability of the seizure and confiscation of paper sheets valued at ?2,03,800. The appellant contested the liability of seizure and confiscation of paper sheets, claiming they were raw materials received under challan for job work and further process, not manufactured by them. The impugned order stated that the seized paper sheets could not be correlated with the documents submitted by the appellant, leading to the conclusion that they were processed or semi-processed goods meant for manufacture and clearance without duty payment. However, the Tribunal found this reasoning legally unsustainable as the goods were not identified by their classification or excisability after due manufacture. The possibility of the goods being semi-processed for further use in the manufacture of final excisable products was not a valid basis for confiscation. Since there was no categorical finding regarding the offense with reference to the impugned goods or whether they were at any stage excisable products, the impugned order upholding the confiscation was set aside, and the appeal was allowed.

Penalty Imposed on the Manager:
The second appeal was by the Manager of the main appellant's unit, who was imposed a penalty of ?49,088 by the Original Authority under Rule 25, which was later reduced to ?10,000 by the impugned order. The Manager contended that he was a paid employee of the appellant's unit with no personal interest or profit in the transactions, requesting the waiver of the penalty. The Tribunal noted that the penalty was imposed under Rule 25 by the Original Authority, but on appeal, the Commissioner (Appeals) held the appellant liable for penalty under Rule 26 and reduced it to ?10,000. As Rule 26 was not invoked or alleged in the notice, the impugned order could not revise or reduce the penalty imposed under Rule 25. Therefore, the penalty imposed on the Manager was set aside.

In conclusion, the Tribunal disposed of the appeals by setting aside the confiscation of paper sheets and the penalty imposed on the Manager, based on the legal analysis and findings presented in the judgment.