2017 (12) TMI 1084 - AT - Central Excise

Jurisdiction of adjudicating authority - goods manufactured in the state where the adjudicating authority had no jurisdiction - Held that - it is established beyond doubt that the goods in question were duty paid and not manufactured by respondent and since the said goods were duty paid and not manufactured within the jurisdiction of Adjudicating Authority. He had no jurisdiction to deal with them and, therefore, the order passed by learned Commissioner (Appeals) is sustainable. The goods in question were duty paid and they were manufactured by manufacturers in Maharashtra, Karnataka and Uttar Pradesh and they were not manufactured by the respondent. Further, since duty of Central Excise was discharged, they were no more excisable goods. Therefore, the Adjudicating Authority did not have any jurisdiction over them. Appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Confiscation of sugar stored in non-duty paid godown without recording receipt in statutory record.
2. Adjudication of confiscation, penalty, and redemption fine.
3. Appeal against Order-in-Appeal No. 361-362-CE/MRT-II/2010 dated 29.10.2010.
4. Jurisdiction of Adjudicating Authority over duty paid goods not manufactured by respondent.

Analysis:
1. Confiscation of sugar stored in non-duty paid godown:
The case involved the respondent procuring sugar from various manufacturers and storing it in a godown outside their manufacturing premises without recording its receipt in any statutory record. The Central Excise Department seized the sugar due to suspicions of replenishing and stock storage. The original authority confiscated the sugar and imposed penalties. The Commissioner (Appeals) held that since the goods were duty paid and not disputed by Revenue, confiscation was unwarranted. The respondent's submission of evidence and compliance with payment methods were considered.

2. Adjudication of confiscation, penalty, and redemption fine:
The original authority confiscated the sugar and imposed penalties on the respondent and a personal penalty on the manager. The Commissioner (Appeals) overturned this decision, stating that the confiscation, demand of duty, and penalties were not sustainable. The Commissioner found that the goods were duty paid, not entered in records, and the penalty on the manager was unwarranted. The Revenue appealed these decisions, citing various grounds including unaccounted storage, clandestine removal, and contravention of rules.

3. Appeal against Order-in-Appeal No. 361-362-CE/MRT-II/2010:
The Revenue filed an appeal against the Order-in-Appeal dated 29.10.2010, challenging the Commissioner's findings regarding the duty paid nature of the goods, confiscation, and penalties. The Revenue argued that the Commissioner erred in not considering the illegal and unaccounted storage of goods and the replenishment of clandestinely removed goods. Various provisions of the Central Excise Rules were cited to support the appeal.

4. Jurisdiction of Adjudicating Authority over duty paid goods:
The Adjudicating Authority did not have jurisdiction over the duty paid goods stored by the respondent, as they were not manufactured by the respondent and the duty of Central Excise was already discharged. The Tribunal upheld the Commissioner's decision, stating that since the goods were duty paid and not within the Adjudicating Authority's jurisdiction, the order was sustainable. The appeal filed by Revenue was dismissed, and the respondent was entitled to consequential relief as per law.