1997 (10) TMI 164 - AT - Central Excise

Summary

Issues:
Departmental appeal against Order-in-Appeal confirming penalty but setting aside confiscation and redemption fine. Department contends confiscation was wrongly set aside. Respondents filed Cross-objection stating law was applied correctly. Respondents argue no opportunity given to produce goods and redemption fine was not legally sustainable. Bond required production of goods for confiscation. Department seeks vacation of impugned order.

Analysis:

1. Departmental Appeal:
The Department appealed against the Order-in-Appeal confirming a penalty but setting aside confiscation and redemption fine. The Department argued that the Commissioner (Appeals) wrongly set aside the confiscation of printing ink seized from a Tempo and a factory, citing the judgment of Uptron India Ltd. v. CCE, Allahabad. The Department maintained that the Additional Commissioner rightly ordered confiscation and redemption fine, allowing the assessee to surrender the property if not interested in paying the fine. The Department also claimed that the procedure followed was in line with the Tribunal's observations in M/s. Grauer & Weil (India) Ltd. v. CCE, Baroda. The Department sought the vacation of the impugned order and restoration of the Order-in-Original for confiscation of the goods.

2. Cross-objection by Respondents:
The respondents filed a Cross-objection stating that the impugned order correctly applied the law based on the Tribunal's decision in M/s. Grauer & Weil (India) Ltd. v. CCE, Baroda. The respondents argued that the adjudicating officer did not allow the production of goods released provisionally for safe custody. They contended that imposing a redemption fine without demanding the production of goods and ordering their confiscation was legally unsustainable. The respondents referred to a security bond executed by them, requiring the production of goods when directed. They emphasized that the order of confiscation without adhering to the bond's terms was improper. Citing Tribunal decisions, the respondents sought the rejection of the Departmental appeal.

3. Judgment and Analysis:
The judge considered the submissions and reviewed the case law. The judge noted that the terms of the security bond required the production of goods when called upon by the competent authority. Provisional release of seized goods aims to maintain their quality and condition, pending further proceedings. Confiscation is subject to adjudication, and if goods are not liable for confiscation, they must be released. The judge emphasized that imposing redemption fine or penalty requires the production of goods as per the bond terms. In cases of provisional release, strict adherence to the bond terms is necessary. The judge concluded that without the availability of goods for confiscation, no order of confiscation or redemption fine can be passed. As the goods were still available for production as per the bond, any order of confiscation without directing the goods' production would contradict the bond terms. Considering the Tribunal's decisions, the judge rejected the Department's appeal.

In conclusion, the judgment upheld the impugned order, emphasizing the importance of adhering to the terms of the security bond for the production of goods before imposing confiscation or redemption fines.