2014 (9) TMI 586 - AT - Central Excise

Confiscation of goods - Penalty u/s 11AC - Redemption fine - Held that - All the goods had been booked through the transporter M/s. Arun Goods Transport Company. The goods covered under three GRs No. 918, 919 and 920 all dated 24.6.09 and consigned to Shri Chander Prakash of Burhanpur, Shri Raju Bhai of Khandwa and M/s Hemant Traders of Vishnagar had been booked by M/s. Shiva Traders and there is no dispute that the goods covered/under these three GRs, had been manufactured by the Appellant company. M/s. Shiva Traders have been found to be a factitions entity. While in respect of the above mentioned goods seized from the truck there were no Central Excise invoices issued by the manufacturer evidencing payment of duty, on 24.6.09, the appellant have issued 3 invoices No. 14, 15 and 16 dated 24.6.2009 showing clearance of the consignments of snuff to Shri Chander Prakash of Burhanpur, Shri Raju Bhai of Khandwa and M/s Hemant Traders of Vishnagar. Since the goods covered under GRs No. 918, 919 and 920 all dated 24.6.09 seized from the truck were consigned to Shri Chander Prakash of Burhanpur, Shri Raju Bhai of Khandwa and M/s Hemant Traders of Vishnagar and since on the same date the appellant have also issued invoices No. 14, 15 and 16 dated 24.6.2009 to these very persons showing clearance of the goods to them on payment of duty, just because the consignor of the, goods mentioned in the GRs is M/s. Shiva Traders and no invoices has been issued by the Appellant to M/s. Shiva Traders, it cannot be inferred that the goods covered under the three GRs No. 918, 919 and 920 all dated 24.6.09 seized from the truck are different from the goods covered under the invoices No. 14,15 & 16 dt. 24/6/07 and had been cleared by the Appellant without payment of duty, as it is not the Department s case that the seized goods covered under the three G-Rs and the goods covered under the three invoices No 14,15 & 16 dt. 24/6/07 are different in terms of quantity. Since the Appellant have already debited the duty on the goods cleared under invoice Nos. 14, 15 and 16 dated 24.6.2009, duty in respect of same goods cannot be demanded. However, looking to the conduct of the appellant, penalty under Rule 25 would be warranted. In view of this, while the duty demand is set aside, the imposition of penalty on them is upheld. - Decided partly in favour of assessee.

Summary

Issues: Duty demand, Penalty imposition, Confiscation of goods

Duty Demand:
The case involved the interception of a vehicle carrying goods by the Central Excise division, leading to the seizure of snuff from various manufacturers, including the appellant. The appellant had cleared goods under specific invoices, but the seized goods were linked to a fictitious entity, M/s. Shiva Traders. The appellant argued that they had sold the goods at the factory gate, and it was the buyers who arranged transport. The Tribunal noted discrepancies in the invoices and goods seized, emphasizing that the seized goods lacked evidence of duty payment. However, since the appellant had already cleared the goods under valid invoices, the duty demand was set aside. The Tribunal upheld the penalty under Rule 25 due to the appellant's conduct.

Penalty Imposition:
The appellant contended that the duty demand and penalty imposition were unjustified as they had cleared the goods under valid invoices. The Department argued that the seized goods were different from those cleared by the appellant, pointing to the involvement of M/s. Shiva Traders. The Tribunal found that while duty demand was not warranted, penalty under Rule 25 was justified based on the circumstances. The appellant's conduct raised suspicions, leading to the partial allowance of the appeal with the penalty upheld.

Confiscation of Goods:
The Deputy Commissioner had confirmed duty demand and imposed penalties while ordering the confiscation of seized goods. The Commissioner (Appeals) upheld this decision. However, the Tribunal, after analyzing the discrepancies between the seized goods and cleared goods, set aside the duty demand but upheld the penalty. The Tribunal highlighted the possibility that the appellant initially cleared goods without duty payment and later issued invoices to cover up the irregularities. Consequently, the Tribunal partially allowed the appeal, emphasizing the penalty imposition while setting aside the duty demand.