2018 (8) TMI 789 - AT - Central Excise

Clandestine removal - confiscation of seized goods - demand of duty on seized PVC pipes on the premise that the said goods are meant for clandestine removal, therefore, they are liable to pay duty - Held that - Admittedly, the show cause notice issued for the finished goods having MRP but the seized goods are not the said goods for which the show cause notice has been issued to the appellant. In that circumstances, the finished goods in the brand name of Kalinga brand PVC Pipes and Cables of ₹ 20,15,710/-, Calcium Carbonate CPW, Resin amounting ₹ 9,61,200/- and PVC Granules and Packing materials PVC Scrap amounting ₹ 1,00,000/- cannot be confiscated without issuance of the show cause notice - Confiscation of the said goods is bad in law. With regard to seizure of goods in the case of M/s Shree Ganesh Udyog, the goods seized are Kalinga brand wire & Cables to the tune of ₹ 19,39,910/-, plastic granules amounting to ₹ 1,31,200/- and Calcium Carbonate CPW & Resin amounting to ₹ 3,36,250/-, Calcium Carbonate CPW & Resin are the raw materials and same cannot be confiscated under Rule 25 of the Central Excise Rules, 2002. With regard to plastic granules, it is not the case of the Revenue that the appellant are manufacturing branded goods of third party. As the appellant are only manufacturing plastic granules and enjoying the benefit of SSI exemption under N/N. 8/2003-CE dated 01.03.2003. Further, the Revenue has not come with any evidence that the appellant is not entitled for the said exemption for manufacturing of plastic granules in their factory. Therefore, the said finished goods are not liable for confiscation - In that circumstances, goods seized in the factory of M/s Shree Ganesh Udyog are not liable for confiscation. Consequently, the redemption fine and penalties imposed on M/s Shree Ganesh Udyog is set aside and penalty imposed on Shri Anil Kapoor, Partner is also set aside. Demand of duty against M/s Shree Ganesh Industries on PVC Pipes - Held that - The said PVC Pipes have not been removed from the factory of the appellant. As the duty payable at the time of clearances of goods, in that circumstances, at this stage, no duty is payable by the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of seized goods and imposition of redemption fine and penalties.
2. Demand of excise duty against the appellant.
3. Typographical error in the show cause notice.

Confiscation of Seized Goods and Imposition of Redemption Fine and Penalties:
The case involved seized goods such as PVC Pipes, Calcium Carbonate, Resin, PVC Granules, and Wires and Cables, with redemption fine and penalties imposed. The investigation led to show cause notices for confiscation and penalties. The appellant argued that the seized goods did not belong to them and pointed out discrepancies in the show cause notices. The Tribunal found that the confiscation of certain goods was unjust as they were not the subject of the show cause notice, leading to the setting aside of redemption fines and penalties.

Demand of Excise Duty Against the Appellant:
The demand of excise duty against the appellant was based on the allegation of clandestine removal of goods. The appellant contended that duty is payable only upon clearance of goods, which had not occurred. The Tribunal agreed with the appellant, stating that duty is payable at the time of clearance, and since the goods had not been cleared, no duty was currently payable.

Typographical Error in the Show Cause Notice:
A typographical error in the show cause notice led to confusion regarding the seized goods and the parties involved. The appellant argued that the goods seized did not match the description in the notice. The Tribunal found discrepancies in the show cause notice and ruled in favor of the appellant, setting aside penalties and confiscation of goods based on the errors identified.

In conclusion, the Tribunal set aside the impugned orders, allowing the appeals with consequential relief. The judgment highlighted the importance of accurate documentation and adherence to legal procedures in cases involving confiscated goods, redemption fines, penalties, and demands of excise duty.