2018 (12) TMI 95 - HC - Central Excise

Clandestine removal - surplus stock of angles, channel and joist - appellant was issued show cause notice on 31-12-2012 on the ground that the goods were kept with intent to be cleared without payment of duty - Held that - The appellate Tribunal has observed that there is nothing on record to support the appellant s argument that such goods were manufactured in trial run and did not meet the necessary specifications. Since the quantity of 994.080 MT was found to be considerable the appellate Tribunal concluded that it stands on a different footing then billet/bloom. Liability to make payment of central excise duty arose the moment excisable goods are manufactured, but the appellant did not make payment of the goods from May, 2012, therefore, the appellate Tribunal has rightly rejected the argument concerning angles, channel & joist. Presence of 994.080 MT of angles, channel & joist having not been disputed, non-acceptance of appellant s explanation does not raise any substantial question of law - appeal dismissed - decided against appellant.

Summary

Issues:
1. Confiscation of seized goods and imposition of redemption fine and penalty under Central Excise Rules, 2002.
2. Adequacy of explanation for surplus stock of goods found during verification.
3. Applicability of duty evasion intent to the surplus stock of goods.
4. Legal validity of the Tribunal's decision in reducing redemption fine and penalty.
5. Existence of substantial question of law in the appeal.

Analysis:
1. The judgment involves the challenge against an order passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, which was preferred to assail an order-in-original passed by the Commissioner of Central Excise, Raipur for the confiscation of seized goods valued at a specific amount under Rule 25 of the Central Excise Rules, 2002, along with the imposition of a redemption fine and penalty. The Tribunal partially allowed the appeal by reducing the redemption fine and penalty amount.

2. The appellant was issued a show cause notice based on the excess stock of finished goods found during a verification process. The appellant argued that the explanation provided for the surplus stock of certain goods was not properly appreciated by the Tribunal, leading to an alleged error of jurisdiction.

3. The judgment delves into the analysis of the surplus stock of goods, highlighting that while a portion of the stock was satisfactorily explained by the appellant, the stock of angles, channel, and joist found in excess was deemed to be kept with intent to evade duty. The Tribunal concluded that the appellant failed to provide sufficient evidence to support the claim that the goods were manufactured in a trial run and did not meet necessary specifications, leading to the rejection of the appellant's argument.

4. The Tribunal's decision to reduce the redemption fine and penalty was upheld by the High Court, emphasizing that the presence of the disputed surplus stock and the non-acceptance of the appellant's explanation did not give rise to any substantial question of law. Therefore, the appeal was dismissed as lacking merit.

5. The judgment concludes that no substantial question of law arises in the appeal for determination, ultimately resulting in the dismissal of the appeal.