2015 (5) TMI 333 - AT - Central Excise

Confiscation of goods - Imposition of redemption fine - Clearance of goods without payment of duty - Misdeclaration of goods - Held that - Statement of truck driver is crucial who has stated that they were carrying out the goods from Sambhal and going to Rampur. This statement has not been verified / controverted by the Revenue with any evidence. Moreover, the Form 21 of UP state sales tax also supports the case of appellants that they have procured the goods from farmers. In these circumstance s Revenue has made the case only on the basis of test report of Shriram Institute to say that as goods are having 26% of Mentha Oil therefore are not Mentha Oil but of DMO. In fact, DMO carries more than accumulated solo impurities which fact is ignored,. Moreover the statement of truck driver and Form 21 supports the case of the appellant, as no statement of farmers has been recorded i.e. also support the case of the appellant. In these circumstances, goods are not required to be seized at all. Therefore, as the goods are not required to be seized, goods are not liable for confiscation consequently redemption fine is set aside as redemption fine is not imposable and penalty on Shri Surrender Kumar Gupta is not imposable. In these circumstances, impugned order is set aside. - Decided in favour of assessee.

Summary

Issues:
1. Seizure and confiscation of menthol oil and truck carrying DMO oil.
2. Confirmation of redemption fine and penalties imposed.
3. Validity of the case against the appellants based on the seized goods.

Analysis:
1. The appellants challenged the impugned order where menthol oil and a truck carrying DMO oil were seized and confiscated, with redemption fines and penalties imposed. The case revolved around the procurement of goods by the appellants from farmers and the alleged clearance of DMO in the guise of Mentha Oil without duty payment.

2. The facts revealed that the appellants, as manufacturers of DMO, procured goods using Form 21 under UP State Sales Tax Provisions from farmers. The truck carrying Mentha Oil was detained, leading to its seizure based on suspicions of duty evasion. The authorities imposed fines and penalties, which the appellants contested.

3. The appellants argued that the truck driver's statement and the Form 21 supported their case, emphasizing that the goods contained 26% Mentha Oil, as confirmed by a report from Shriram Institute. They contended that the case against them was false and should be set aside.

4. Conversely, the Revenue contended that the goods, with only 26% Mentha Oil, were essentially DMO being cleared as Mentha Oil, justifying the seizure. However, the crucial statement of the truck driver, supported by Form 21, remained uncontroverted by the Revenue.

5. After hearing both parties, the Tribunal found that the Revenue's case relied solely on the test report, neglecting crucial evidence such as the truck driver's statement and Form 21. The Tribunal highlighted that DMO typically carries more impurities, which were ignored in the case. As the evidence favored the appellants and no farmer statements were considered, the goods were deemed unjustly seized.

6. Consequently, the Tribunal set aside the impugned order, ruling that the goods were not liable for confiscation, leading to the cancellation of redemption fines and penalties. The appeals were allowed, granting consequential relief if applicable.