2020 (7) TMI 316 - AT - Central Excise

Clandestine removal - double jeopardy - two show cause notices - Confiscation of Currency - confiscation of goods - penalty - HELD THAT - Apparently and admittedly, two separate show cause notices were served upon the appellant, one proposing the confiscation of recovered finished goods, unfinished goods, raw material and the impugned amount holding the same to be the sale proceed of clandestinely removed goods. Evasion of Central Excise duty with recovery thereof was proposed vide a subsequent separate show cause notice. The confirmation of ₹ 4,10,000/- was proposed under the provision of Rule 25 of Central Excise Rules, 2002 whereas the duty was demanded alongwith interest and penalty was proposed under the provisions of Section 11A/11AA/11AC of Central Excise Act, 1944. Both the show cause notices have alleged different offences to have been committed by the appellants, which are punishable under different provisions of the law - Penalty for both the show cause notices irrespective that they are arising out of the same transaction of acts cannot be called as double jeopardy. Appeal dismissed.

Summary

Issues:
1. Confiscation of cash and adjustment towards duty liability.

Analysis:
The case involved the challenge to an order confirming the proposals of two separate show cause notices issued to the appellant. The first notice proposed the confiscation of goods and cash, while the second notice demanded Central Excise duty along with interest and penalties. The appellant contested the confiscation of cash amounting to ?4,10,000, arguing that it was in excess of the tax liability already paid. The appellant sought the cash to be refunded rather than adjusted towards the duty liability. The dispute centered on whether the confiscated cash should be adjusted towards duty liability or refunded to the appellant.

Upon hearing arguments from both sides, the Tribunal considered the nature of the two show cause notices and the offenses alleged under different provisions of the law. The Tribunal noted that the confiscation of cash under Rule 25 of the Central Excise Rules, 2002 was distinct from the demand for duty under the Central Excise Act, 1944. The Commissioner (Appeals) had correctly observed that confiscation implies appropriation consequential to seizure, vesting the property with the government. Therefore, the confiscated cash could not be used for adjusting the appellant's tax liabilities. The Tribunal upheld the Commissioner's findings, emphasizing that the confiscated cash could not be considered as owned by the appellant for adjusting their liabilities.

In conclusion, the Tribunal found no illegality in the order confirming the confiscation of cash and upheld the decision. The appeal challenging the adjustment of the confiscated cash towards duty liability was dismissed. The judgment was pronounced on 13.07.2020 by Mrs. Rachna Gupta, Member (Judicial) of the Appellate Tribunal CESTAT New Delhi.