2013 (9) TMI 540 - AT - Central Excise

Rule 25 of the Central Excise Rules, 2002 regarding confiscation of raw material/semi-finished goods - Held that - There is no provision for confiscation of raw materials or semi-finished goods and Rule 173Q/Rule 25 provides for confiscation of finished goods only, the decision of relying upon the Tribunal in the case of Annapurna Impex Pvt. Ltd. 2009 (8) TMI 200 - PUNJAB & HARYANA HIGH COURT - Rule 25, under which the semi-finished processed goods has been confiscated is applicable only to finished excisable goods Decided in favor of appellant.

Summary

Issues:
1. Confiscation of goods and imposition of penalties upheld by the first appellate authority.
2. Interpretation of Rule 25 of the Central Excise Rules, 2002 regarding confiscation of excisable goods.
3. Applicability of judicial precedents in similar cases to the current scenario.

Issue 1: Confiscation of goods and imposition of penalties upheld by the first appellate authority.
The appeals were directed against an order upholding the confiscation of goods and imposition of penalties on both appellants by the first appellate authority. The impugned order proposed the confiscation of 4 old and used plates valued at Rs.84,788 under Rule 25 of the Central Excise Rules, 2002, along with a demand for duty and penalties. The first appellate authority set aside the duty demand as the goods were duty paid by another unit, but upheld the confiscation and penalties imposed.

Issue 2: Interpretation of Rule 25 of the Central Excise Rules, 2002 regarding confiscation of excisable goods.
The main contention revolved around the interpretation of Rule 25 concerning the confiscation of excisable goods. The Tribunal analyzed that Rule 25 pertains to finished excisable goods from manufacturers, warehousers, or registered dealers. It was observed that the goods in question were raw materials received for consumption by the appellant, duly duty paid, and not finished goods subject to confiscation under Rule 25. Citing judicial precedents, it was established that confiscation of raw materials not accounted for is not permissible under Rule 25.

Issue 3: Applicability of judicial precedents in similar cases to the current scenario.
The Tribunal referred to past judgments, including the case of Annapurna Impex Pvt. Ltd., upheld by the High Court of Punjab & Haryana, and the decision in Anchal Prints Pvt. Ltd. The precedents emphasized that confiscation of raw materials not accounted for is not supported by law. Relying on these precedents, the Tribunal set aside the impugned order to the extent of confiscation and upheld the appeals, concluding that the goods in question being raw materials were not liable for confiscation under Rule 25.

In conclusion, the Tribunal ruled in favor of the appellants, setting aside the confiscation of goods and penalties imposed, in line with the interpretations of Rule 25 and established judicial precedents. The judgment highlighted the distinction between raw materials and finished excisable goods under Rule 25, ultimately leading to the allowance of the appeals and providing consequential relief.