2015 (7) TMI 707 - HC - Central Excise

Confiscation of goods - Penalty under Rule 25 of the Central Excise Rules, 2002 - Held that - The basic finding of the Commissioner (Appeals) was that the quantum of approximately 581 MT had not been physically weighed and could not have been weighed within six hours. Hence, the conclusion that there was an excess stock, was incorrect since the verification itself suffered from infirmities. On the second aspect, it has been found that a mere suspicion cannot take the place of proof of an intent to clandestinely remove excisable goods. These are pure findings of fact on which no substantial question of law would arise - Decided against Revenue.

Summary

Issues:
Appeal against Tribunal's order confirming Commissioner's decision setting aside confiscation order under Rule 25 of Central Excise Rules, 2002 and imposing redemption fine and personal penalty.

Analysis:
The High Court considered the appeal against the Tribunal's decision confirming the Commissioner's order. The Commissioner (Appeals) had made two principal findings. Firstly, it was observed that the stock found at the premises was not physically weighed to determine excess stock, raising doubts on the verification process. The Commissioner noted discrepancies in the verification method and lack of essential details in the panchnama, highlighting uncertainties in the officers' actions. Secondly, it was found that there was no supporting evidence indicating the goods were intended for clandestine removal, a crucial aspect under Rule 25 of the Rules. The Tribunal upheld both findings of the Commissioner.

The High Court emphasized the Commissioner's conclusion that approximately 581 MT of stock had not been physically weighed within a reasonable timeframe, casting doubt on the existence of excess stock. This critical flaw in the verification process led to the incorrect determination of excess stock. Additionally, the Court agreed with the assessment that mere suspicion could not substitute proof of intent for clandestine removal of excisable goods. These factual findings did not give rise to any substantial legal questions, leading to the dismissal of the appeal.

In conclusion, the High Court dismissed the appeal, upholding the Tribunal's decision based on the Commissioner's findings. The Court also ruled that no costs would be awarded in this matter.