2010 (1) TMI 422 - AT - Central Excise

Confiscation- Excess goods- The respondents manufactured excisable goods and cleared the same without accounting for the same and without paying the duty. The lower appellate authority has upheld the duty demand as well as the penalty imposed on the respondents. Held that- The respondents manufactured excisable goods and cleared the same without accounting for the same and without paying the duty. The lower appellate authority has upheld the duty demand as well as the penalty imposed on the respondents.

Summary

Issues: Duty demand, penalty imposition, confiscation of goods, notice requirements, appeal dismissal

In this judgment by the Appellate Tribunal CESTAT, CHENNAI, the issues involved were duty demand and penalty imposition on the respondents for manufacturing excisable goods without accounting for them and clearing them without paying duty. The lower appellate authority upheld the duty demand and penalty but set aside the confiscation of excess goods found within the factory premises and clandestinely cleared goods seized from another location, leading to an appeal by the department.

The department argued that the impugned goods, including excess goods found within the factory premises, should be confiscated based on the decision of the Hon'ble Bombay High Court in a specific case. They contended that notice issued to one individual connected to the seized goods was sufficient notice to the entity from whom the goods were seized. On the other hand, the respondents argued that the law required a notice to be issued directly to the entity from whom the goods were seized, citing a relevant case law.

After considering the submissions and case law cited by both sides, the Tribunal found that the respondents had indeed manufactured excisable goods without accounting for them and clandestinely cleared them without paying duty. The excess goods found within the factory premises were deemed liable for confiscation as per the Central Excise Rules and the decision of the Hon'ble Bombay High Court. The Tribunal set aside the lower appellate authority's order and confiscated the excess goods with an option for redemption upon payment of a fine. However, regarding the goods seized from another entity, the Tribunal upheld the lower appellate authority's decision to set aside the confiscation, stating that the department had erred in not issuing a separate notice to that entity.

The Tribunal partly allowed the department's appeal, upholding the confiscation of excess goods found within the factory premises but dismissing the appeal against the order concerning the other entity. The appeal against the individual associated with that entity was also dismissed as the department's appeal was specifically related to the confiscation of goods.