2014 (6) TMI 452 - AT - Central Excise

Confiscation of raw materials - penalty under Rule 209 of Central Excise Rules, 1944 - Held that - Clear cut finding has been given that raw materials were utilized for the manufacture of finished goods and only the finished goods were held to be subsequently cleared illicitly for which duty was demanded separately. Rule 209 of the Central Excise Rules, 1944 talks of the excisable goods when removed from the factory are only liable to confiscation. In the instant case there is no evidence that raw materials were cleared as such from the factory. Secondly, there cannot be a confiscation of goods which are not available for confiscation. There is no indication in the grounds of appeal whether any appropriate bond undertaking executed by the appellant, existed justifying such confiscation or imposition of redemption fine. Duty with respect to the finished fabrics also stands confirmed - Decided against Revenue.

Summary

Issues: Confiscation of raw materials and imposition of redemption fine

Confiscation of Raw Materials:
The appeal was filed by the Revenue against the order where the first appellate authority held that confiscation of raw materials utilized in the manufacture of finished goods was not warranted. The Revenue argued that the goods were liable to confiscation under Rule 209 of the Central Excise Rules, 1944, for contravening provisions with the intent to evade duty. However, the appellate tribunal noted that the first adjudicating authority had clearly found that raw materials were used for manufacturing finished goods, and only the finished goods were illicitly cleared. The tribunal emphasized that Rule 209 applies to excisable goods removed from the factory and since there was no evidence of raw materials being cleared as such, confiscation was not applicable. The tribunal also highlighted the absence of appropriate bond undertakings justifying confiscation or imposition of redemption fine. Consequently, the tribunal upheld the first appellate authority's decision as legally correct.

Imposition of Redemption Fine:
The tribunal further emphasized that the order passed by the first appellate authority was based on sound legal reasoning and correctly confirmed duty with respect to the finished fabrics. The tribunal rejected the Revenue's appeal, concluding that the confiscation of raw materials and imposition of redemption fine were not justified in this case. The decision was made based on the lack of evidence supporting the confiscation of raw materials and the absence of appropriate justifications for such actions. Therefore, the appeal filed by the Revenue was dismissed by the tribunal.