2005 (6) TMI 108 - AT - Central Excise

Redemption fine - confiscation of the vehicle - clandestine removal of yarn - Quantum of - Penalty - HELD THAT - There is a penalty of Rs. 3,000/- on M/s. SSKT under Rule 209A. Under this provision of law, a penalty could be imposed on a person who acquired possession of, or otherwise physically dealt with, any excisable goods which, according to his belief or knowledge, was liable to confiscation. The above penalty is in relation to confiscation of the cotton yarn, the goods was seized while in transit. The department has no case that M/s. SSKT had physically dealt with the goods in any manner whatsoever. Hence Rule 209A was not invocable against them. Appeal No. E/911/2004 is allowed. In the result, penalty on the appellant stands vacated. A redemption fine of Rs. 25,000/- has been imposed in lieu of confiscation of the tempo. It has been argued by ld. Consultant that neither the driver nor the owner of the tempo had any knowledge of the fact that goods liable to confiscation were being transported by the vehicle. It has been pointed out that the original authority recorded a finding that the driver had no knowledge of the said fact. There is also nothing on record to indicate that the owner of the vehicle was knowing that it was being used for transporting goods which were liable to confiscation. The mandatory condition for confiscation of a vehicle u/s 115 of the Customs Act (made applicable to goods under the Central Excise Act) is that the owner of the vehicle, his agent, if any, and any person in charge of the vehicle (driver) should have the knowledge that the vehicle was being used for transportation of offending goods. This condition has not been satisfied in the instant case. Consequently the redemption fine requires to be set aside. Appeal is accordingly allowed.

Summary

Issues:
1. Confiscation of cotton yarn without Central Excise invoice during transportation.
2. Imposition of redemption fine, penalty, and confiscation of vehicle.
3. Payment of duty prior to show cause notice and penalty under Section 11AC.
4. Penalty on M/s. SSKT under Rule 209A.
5. Imposition of redemption fine on the tempo owner.

Issue 1:
The officers intercepted a Tempo transporting cotton yarn without an invoice, leading to the confiscation of goods. The lower authorities allowed redemption of the goods upon payment of a fine, which was upheld due to the significant value of the goods and the absence of proper documentation.

Issue 2:
The original authority confiscated the cotton yarn and the vehicle, imposing fines and penalties. The appellate authority affirmed these decisions. The Tribunal found the redemption fine reasonable given the circumstances of the case, upholding the decision.

Issue 3:
A penalty under Section 11AC was imposed for clandestine removal of yarn, even though the duty was paid before the show cause notice. The appellant argued against this penalty, citing legal precedents. The Tribunal referenced relevant case law and concluded that the penalty imposed on the manufacturer could not be sustained, setting aside the penalty.

Issue 4:
M/s. SSKT faced a penalty under Rule 209A for acquiring possession of goods liable to confiscation. However, as there was no evidence of physical dealing with the goods, the penalty was deemed inapplicable, and the appeal was allowed, vacating the penalty on M/s. SSKT.

Issue 5:
A redemption fine was imposed on the tempo owner, contested by the consultant claiming lack of knowledge regarding the transported goods. The Tribunal noted the absence of evidence showing the owner or driver's knowledge of the offending goods, leading to the setting aside of the redemption fine, and the appeal was allowed in favor of the tempo owner.

In summary, the judgment addressed various issues related to the confiscation of goods, imposition of fines and penalties, payment of duty, and application of relevant legal provisions. The Tribunal carefully analyzed each issue, considered arguments, cited case law, and made decisions based on the facts and legal interpretations presented during the proceedings.