1999 (11) TMI 291 - AT - Central Excise

Summary

Issues:
1. Scope of adjudication beyond show-cause notice
2. Confiscation of seized goods and imposition of penalties

Scope of adjudication beyond show-cause notice:
The appeals arose from an order passed by the Commissioner of Central Excise (Appeals) based on a surprise visit to the appellant's factory, where excess raw materials were found. The Central Excise Officers seized the goods and issued show cause notices for confiscation and duty demand. The jurisdictional Assistant Commissioner ordered confiscation, redemption fine, and penalties. The appellants contested the show cause notice, arguing that the adjudication exceeded the notice's scope as certain provisions were not mentioned. The Lower Appellate Authority vacated the duty demand but upheld confiscation without providing reasons, leading to a non-speaking order. The appeal contended that the order lacked justification for confiscation and penalty imposition, going beyond the show cause notice's allegations.

Confiscation of seized goods and imposition of penalties:
The seized goods, already duty-paid, were intended for manufacturing finished products. The appellants argued that the goods were not excisable and should not be confiscated. The show cause notice alleged non-accountal for clandestine removal without duty payment, leading to confiscation and penalties. The appellants referenced a High Court decision deeming market-procured goods as duty-paid. The argument focused on the lack of justification for penalties imposed. The JDR defended the lower authorities' findings, emphasizing the necessity of proper entries in the Form IV Register upon goods receipt. The Tribunal examined whether non-accountal and lack of invoices justified confiscation and penalties under Rule 173Q. It concluded that the order exceeded the show cause notice's scope, lacked justification, and set aside the lower appellate authority's decision, allowing the appeals.

In conclusion, the Tribunal found that the order of confiscation and penalties imposed on the appellants went beyond the allegations in the show cause notice, lacked justification, and therefore allowed the appeals, providing consequential benefits to the respective appellants.