2014 (7) TMI 273 - AT - Central Excise

Duty demand - Clandestine removal of goods - whether the television sets found in the truck were removed by the manufacturers in a clandestine manner or not - Held that - Admittedly, the transporters is not a manufacturer of various brand of television sets found loaded in the truck. No investigation stand conducted by the Revenue to find out as to who was the manufacturer of the said television sets even though the brand names were written on the same. Further, there is neither any investigation nor any evidence on record to show that said television sets stand cleared by the manufacturer without payment of duty. In the absence of same, no finding of the fact as regards their illicit character can be arrived at. Merely because the consignor and the consignee were allegedly found to be fake, as per the Revenue, tainted character of television set vis- -vis payment of excise duty cannot be upheld. Further, in any case, the confirmation of demand of duty of excise, which is essentially required to be paid by the manufacturer, against the transporter has no legs to stand. As such, I hold that in the absence of any evidence to show that television sets in question were cleared by a manufacturer from his factory, without payment of duty, the finding of the lower authorities cannot be upheld. As rightly argued by the learned advocate, the same could have been booked for transportation by a distributor or a dealer. If there is no justification for confirmation of demand or for confiscation of television sets on the ground that there were no evidence of tainted goods on the consequent finding, there is no justification for confiscation of truck or for imposition of penalty upon the appellant - Decided in favour of Assessee.

Summary

Issues:
1. Confiscation of television sets without payment of duty
2. Confiscation of truck and imposition of penalties on transporters

Analysis:
1. The case involved the interception of a truck carrying television sets without duty paying documents. The investigation revealed discrepancies in the consignor and consignee details, leading to the seizure of the goods and the truck. The Revenue alleged that the television sets worth Rs. 4,45,700 were cleared without duty payment. The Assistant Commissioner confiscated the sets with an option for redemption, confirmed a duty of Rs. 41,741, and imposed penalties. The Revenue sought absolute confiscation of the sets and enforcement of the bond amount. The appellant argued they were only transporters, not manufacturers, and there was no evidence of clandestine manufacturing. The Commissioner (Appeals) upheld the Revenue's appeal, leading to the present appeals.

2. The main issue addressed was whether the television sets were removed clandestinely by the manufacturers. The tribunal noted that the transporters were not the manufacturers, and there was no evidence of duty evasion by the actual manufacturers. Lack of investigation into the manufacturers' involvement and absence of proof of duty evasion led to the conclusion that confiscation of the sets and imposition of penalties on the transporters were unjustified. The tribunal held that without evidence of duty evasion by the manufacturers, the demands and penalties against the transporters were not valid. The orders for confiscation and penalties were set aside, and both appeals were allowed in favor of the appellant.