2019 (12) TMI 227 - AT - Central Excise

Clandestine removal - manufacture and clearance of bags and soft luggage items - non-accounting of goods - confiscation - penalty - HELD THAT - For the impugned goods, another show-cause notice was issued to the appellant which was finally decided by the Commissioner(Appeals) vide his order dt. 14/06/2019 wherein the Commissioner(Appeals) has held that the demand in respect of the goods seized on the premises of Outshiny Kodigehalli was not sustainable since there was no evidence to prove that the appellant were attempting to clear them without payment of duty - Further, there is no dispute about the fact that the goods in question i.e. 1000 numbers of bags were found lying in the assessee s own premises and there is no evidence placed on record that the appellant had intended to clear the same without payment of duty from the premises of Outshiny Kodigehalli. Therefore unaccountal of the goods by the appellant at best is only a technical breach. The impugned order holding that the seized goods is liable to be confiscated is bad in law and unsustainable - the imposition of penalty on the appellants and Outshiny Kodigehalli (appellant No.2) are liable to be set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Confiscation of bags without payment of Central Excise duty
- Imposition of redemption fine and penalty under Central Excise Act
- Evidence of intent to clear goods without payment of duty
- Applicability of legal precedents in similar cases

Confiscation of Bags without Payment of Central Excise Duty:
The judgment involves two appeals against an order for confiscation of 1000 bags valued at ?9,99,000, manufactured and cleared without payment of Central Excise duty. The Commissioner of Central Tax had imposed a redemption fine and penalty on the appellants under Section 34 of the Central Excise Act. The investigation revealed that the appellants had manufactured and cleared excisable goods without paying the appropriate duty. The goods were seized under the presumption that they were intended to be cleared without payment of duty. The Commissioner's order held the appellants liable for confiscation and penalty under the Central Excise Rules, 2002.

Imposition of Redemption Fine and Penalty under Central Excise Act:
The Commissioner's order imposed a redemption fine and penalty on the appellants for manufacturing and clearing the bags without paying the required Central Excise duty. The investigation by the Directorate General of Central Excise Intelligence established that the appellants had not accounted for the goods in their statutory records with the intent to clear them without payment of duty. The original authority upheld the demands against the appellants, leading to an appeal before the Commissioner(Appeals). The Commissioner(Appeals) held that the demand related to the goods seized at a specific premises was not sustainable due to lack of evidence of intent to clear them without duty payment.

Evidence of Intent to Clear Goods without Payment of Duty:
The judgment analyzed the presence of evidence regarding the appellants' intent to clear the goods without paying the duty. The Commissioner(Appeals) based the decision on a previous Tribunal order, emphasizing the lack of evidence showing the goods were intended for removal without duty payment. It was noted that the goods were found in the appellants' own premises, with no proof of intent to clear them without duty payment from another location. The absence of evidence regarding intent led to the conclusion that the duty demand was unsustainable.

Applicability of Legal Precedents in Similar Cases:
The judgment considered various legal precedents cited by the appellants, including decisions by the Tribunal and other cases related to duty payment and confiscation of goods. The Tribunal's decision in the appellant's own case, along with other rulings, supported the argument that in the absence of evidence of intent to clear goods without duty payment, the duty demand and confiscation were not justified. The judgment followed the legal principles established in previous cases to set aside the impugned order, including the imposition of penalty on the appellants.

In conclusion, the judgment allowed the appeals by setting aside the impugned order for confiscation, redemption fine, and penalty, emphasizing the lack of evidence regarding the appellants' intent to clear the goods without payment of Central Excise duty. The decision was based on legal precedents and the absence of proof of intent to evade duty payment.