2000 (11) TMI 439 - AT - Central Excise

Summary

Issues:
1. Seizure of goods without payment of Central Excise duty.
2. Claim of ownership by M/s. R.K. Mehra Textile Mills.
3. Imposition of penalty under Rule 209A of Central Excise Rules, 1994.

Analysis:

Issue 1: Seizure of goods without payment of Central Excise duty
The premises of Transporters and Goods Carriers at Amritsar were searched, leading to the seizure of packages despatched from Surat without payment of Central Excise duty. The consignments were found with fictitious names, coded addresses, and lacking valid documents. A show cause notice was issued to lawful owners, including M/s. R.K. Mehra Textile Mills.

Issue 2: Claim of ownership by M/s. R.K. Mehra Textile Mills
M/s. R.K. Mehra Textile Mills claimed ownership of six seized consignments. The Commissioner rejected their claim for five consignments but accepted it for one dispatched by M/s. Rucha Processors (P) Ltd., Surat. A penalty of Rs. 80,000 was imposed under Rule 209A. M/s. R.K. Mehra Textile Mills appealed against this order, arguing that no reasons were provided for the penalty imposition and that they had no involvement in the consignments rejected.

Issue 3: Imposition of penalty under Rule 209A
The Revenue contended that despite the rejection of the claim for five consignments, they were found to be offending goods and ordered to be confiscated, justifying the penalty under Rule 209A. However, the Commissioner's order lacked discussion on M/s. R.K. Mehra Textile Mills' role in handling the goods. The Commissioner's reasoning for the penalty was based on the appellants' failure to establish themselves as bona fide purchasers and submitting false documents, which did not align with the grounds for penalty under Rule 209A. Consequently, the pre-deposit of the penalty was waived, and its recovery stayed pending the appeal's final disposal.