2018 (6) TMI 780 - AT - Central Excise

SSI Exemption - Confiscation of the raw material packaging material as also semi finished and finished goods found in the appellant s factory - seizure on the ground that the same was not entered in the statutory record - penalty - Held that - Admittedly the appellant are working under the small scale exemption limit and there is no evidence to reflect upon the fact that the appellants were not entering the goods with an any malafide intention - confiscation with redemption fine and penalty not justified - appeal allowed.

Summary

Issues: Confiscation of goods not entered in statutory record, imposition of penalty, small scale exemption limit compliance

Confiscation of Goods Not Entered in Statutory Record:
The judgment revolves around the confiscation of raw material, packaging material, and finished goods in the appellant's factory, which were not entered in the statutory record. The appellant argued that being under the small scale exemption limit, they were not legally obligated to maintain the statutory record. The appellant contended that the goods were duly entered in their private record as required by law, and there was no evidence of malafide intention to evade duty. The judge noted the absence of evidence supporting clandestine activities and referenced a previous case to support the appellant's argument. Ultimately, the judge found that the confiscation of goods without evidence of malafide intent or violation of legal obligations was unjustified, leading to the decision to set aside the impugned order and allow the appeals.

Imposition of Penalty:
In addition to the confiscation of goods, penalties were imposed on the appellants. The appellant's argument regarding compliance with the small scale exemption limit and the absence of evidence of malafide intent also applied to the imposition of penalties. The judge emphasized that since the appellants were working within the exemption limit and there was no evidence of wrongdoing, the imposition of penalties was not justified. Consequently, the judge decided to allow both appeals with consequential relief, indicating a favorable outcome for the appellants regarding the penalties imposed.

Compliance with Small Scale Exemption Limit:
A crucial aspect of the case was the appellant's compliance with the small scale exemption limit, which exempted them from certain legal obligations. The judge acknowledged that the appellants were indeed working under this exemption limit, reinforcing the argument that they were not required to maintain the statutory record. This compliance played a significant role in the judge's decision to set aside the confiscation of goods and the imposition of penalties, as it established a legal basis for the appellant's actions. The judge's recognition of the small scale exemption limit as a determining factor in the case highlights the importance of understanding and adhering to relevant legal thresholds and exemptions in similar situations.