1987 (5) TMI 292 - AT - Central Excise

Summary

Issues: Appeal against confiscation and penalty under Central Excises and Salt Act - Use of power in raising steam for heating - Justification of order for confiscation and penalty - Lawful permission granted for duty-free clearances.

Analysis:
The appeal and connected appeal were heard together, and it was previously decided that one appeal was to be dismissed while the present appeal was to be considered on its merits regarding confiscation and penalty. The present appeal was heard based on this direction. A notice was issued to the respondents and three others to show cause why duty should not be recovered, goods seized should not be confiscated, and penalty should not be levied. The Deputy Collector initially confiscated the goods, directed duty recovery, and imposed a penalty. The Appellate Collector later set aside this order. The Central Govt. issued a notice under Section 36(2) of the Act, which led to the present appeal. The issue remaining for consideration was the proposal to set aside the Appellate Collector's order and reinstate the Deputy Collector's order regarding confiscation and penalty.

During the hearing, the Department supported the Deputy Collector's order, arguing that power was used for heating, making the respondents ineligible for duty-free clearances. On the other hand, the respondents contended that the use of power was not alleged earlier, and even if it was, the penalty and confiscation were unjustified. They had sought clarification previously and acted based on the approval received for duty-free clearances. The respondents had filed their classification list claiming exemption from duty, and they had been clearing goods without duty payment based on lawful permission granted.

Considering the uncontested facts presented, the Tribunal held that the order for confiscation and penalty was unjustified. It was further determined that there were no grounds to interfere with the Appellate Collector's order. Consequently, the appeal was dismissed, and the notice issued on 21-8-1980 was discharged.