1994 (1) TMI 166 - AT - Central Excise

Issues:
1. Confiscation of goods due to failure to exercise option within specified time limit.
2. Interpretation of Section 34 of the Central Excises & Salt Act regarding time limit for payment of redemption fine.
3. Authority's discretion in extending time limit for payment of redemption fine.
4. Effect of communication from the Superintendent on the extension of time limit.
5. Application of judicial precedents in determining extension of time limit.

Analysis:

1. The appeal challenged the Order confirming the confiscation of goods due to the appellant's failure to exercise the option to redeem within the specified time limit. The initial order granted an option to redeem, but when the appellant failed to do so within the time specified, the goods were deemed confiscated absolutely to the Government.

2. The appellant argued that Section 34 of the Act does not specify a time limit for payment of redemption fine. The appellant relied on a decision of the Allahabad High Court to support the argument that the communication from the Superintendent, without specifying a date for payment, allowed for payment within a reasonable time. The appellant contended that the order for confiscation was not justified.

3. The Department, represented by the JDR, argued that after the initial period granted in the Order-in-original expired, the goods were deemed confiscated to the State. The JDR contended that only the adjudicating authority could grant an extension of time, and the order for confiscation should not be interfered with.

4. The Tribunal noted that the appellant deposited the redemption fine before any order was passed shutting off their option. The communication from the Superintendent, requesting payment after the specified period, indicated a willingness to consider release upon payment. This suggested that the Department did not intend to adhere strictly to the initial time limit.

5. While acknowledging that Section 34 does not specify a time limit for payment, the Tribunal emphasized that the power to fix a time limit for redemption fine payment is ancillary and should be exercised judiciously. The Tribunal highlighted the statutory obligation to offer payment of fine in lieu of confiscation and the need for discretion in granting extensions, in line with legislative intent.

6. The Tribunal found that the adjudicating authority did not provide a reason for not extending the time for payment. The failure to exercise discretion without justification warranted interference by the Appellate Authority, especially when it did not align with legislative intent.

7. The Tribunal considered the notice from the Superintendent, received after the initial time limit, as effectively extending the period for payment. Relying on the judgment of the Allahabad High Court, the Tribunal deemed the period extended, leading to the decision that the order for confiscation could not be sustained.

8. Consequently, the Tribunal set aside the order for confiscation, as the appellant had paid the redemption fine and opted to exercise the option. The goods were reinvested to the appellant, and the Department was directed to release the goods within two months from the date of the Tribunal's order.

← Previous Next →