2012 (12) TMI 534 - AT - Central Excise

Confiscation of Drums of packing material - drums were found having not been entered in their RG 23A Part I records - Imposition of Penalty - Held that - Statements of appellant had clarified that these drums were old and used drums and were purchased under an invoice which was not cenvatable. As such the question of making entries of the same in RG 23 A Part I does not arise. The appellate authority have not found that appellants have taken the credit in respect of seized drums. The Revenue, for confiscation of drums in question should have shown that they have taken the credit in respect of seized drums. There is no such finding by the authorities below - no reason to uphold the confiscation of drums or to impose penalty on the appellant - in favour of assessee.

Summary

Issues: Confiscation of finished goods, Confiscation of packing material (drums), Imposition of penalties

Confiscation of Finished Goods:
The Central Excise officers visited the factory of the appellants and found finished goods in excess, along with some drums not entered in the records. The original adjudicating authority proposed confiscation of the excess goods and drums, which was later modified by the Commissioner (Appeals). The appellants argued that the drums were old and used, purchased without availing any credit. The Tribunal noted that the appellants clarified that the drums were old and used, purchased with non-cenvatable invoices, and not entered in RG 23 A Part I. The Tribunal found no evidence that the appellants had taken credit for the seized drums and concluded that the confiscation of drums and imposition of penalties were not justified. The impugned order confiscating the finished goods was set aside.

Confiscation of Packing Material (Drums):
The Commissioner (Appeals) upheld the confiscation of the packing material, i.e., drums, and imposed penalties. The appellants contended that the drums were old and used, purchased without availing any credit. The Tribunal observed that the appellants had clarified that the drums were old and used, purchased with non-cenvatable invoices, and not entered in RG 23 A Part I. The Tribunal highlighted that there was no evidence that the appellants had taken credit for the seized drums. As a result, the Tribunal concluded that the confiscation of drums and imposition of penalties were not justified. The impugned order was set aside, providing consequential relief to the appellant.

Imposition of Penalties:
The original adjudicating authority imposed penalties in relation to the confiscation of finished goods and drums. The Commissioner (Appeals) upheld the penalties. However, the Tribunal set aside the confiscation of both finished goods and drums, thereby rendering the imposition of penalties unwarranted. The Tribunal found no evidence that the appellants had availed credit for the seized drums, leading to the conclusion that penalties were not justified. Consequently, the impugned order imposing penalties was set aside, aligning with the decision on the confiscation of goods and packing material.