2014 (12) TMI 1029 - AT - Central Excise

Seizure of goods - Non accounting of goods - Intention to remove goods without payment of duty - Held that - Appellant, during adjudication, had taken stand that the goods were not fully manufactured inasmuch as the process of lime mixing was to be done - There is no test conducted by any expert so as to conclude as to whether the lime mixing has already done or not. As such only fact of excess goods, which are also disputed by the appellant to be not fully finished, read with the statement, cannot held to be confiscable, in the absence of any evidence to show that they were either in the process of being removed clandestinely or were meant for clandestine removal. Accordingly, I set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
1. Seizure of excess chewing tobacco by excise officers.
2. Confiscation of goods and imposition of penalty.
3. Appeal against penalty upheld for partner but not for manufacturing unit.

Issue 1: Seizure of excess chewing tobacco
The appellant, engaged in the production of Unmanufactured Branded Chewing Tobacco, had 74 bags and 13 packets of chewing tobacco found in excess during a stock verification, valued at Rs. 37,837 with a Central Excise Duty of Rs. 10,343. The appellant's representative admitted that the seized goods were manufactured and kept unaccounted for with the intent to remove them without paying duty. The appellant argued that the goods were not fully manufactured as the process of lime mixing was pending, a plea rejected by the authorities as an afterthought. No expert test was conducted to confirm the lime mixing status. The absence of evidence indicating clandestine removal or intent led to the conclusion that the excess goods could not be confiscated.

Issue 2: Confiscation of goods and imposition of penalty
Proceedings were initiated resulting in the confiscation of the excess goods with an option for redemption fine. A penalty of Rs. 28,368 was imposed on the manufacturing unit and the partner. The Commissioner (Appeals) set aside the penalty for the partner but upheld it for the manufacturing unit. The appellant's argument that the goods were not fully finished due to pending lime mixing was not substantiated with expert tests. The lack of evidence supporting clandestine removal or intent rendered the confiscation unjustified. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.

Issue 3: Appeal against penalty upheld for partner but not for manufacturing unit
The appeal against the penalty imposed on the partner was successful, with the penalty being set aside. However, the penalty on the manufacturing unit was upheld by the Commissioner (Appeals), leading to the present appeal. The appellant's contention regarding the unfinished status of the goods was not supported by expert tests, and the absence of evidence indicating clandestine removal or intent led to the decision to set aside the impugned order and grant relief to the appellant.

This detailed analysis of the judgment highlights the key issues of seizure, confiscation, and penalties involved in the case, along with the reasoning and outcomes provided by the tribunal.