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2015 (10) TMI 334 - AT - Central ExciseConfiscation of goods - Imposition of redemption fine - Non availability of goods - Held that - Appellants are not contesting the demand of duty. They have also paid the duty before issue of the Adjudication order. Hon ble Gujarat High Court in the case of M/s Exotic Associates Vs Commissioner of Central Excise - 2009 (11) TMI 293 - GUJARAT HIGH COURT , held that the benefit of reduced penalty under Section 11AC of the Central Excise Act, 1944 would be given if the option was not given to the Appellant earlier. I agree with the submissions of the learned Advocate that the goods are not available and therefore, confiscation and imposition of redemption fine are not sustainable. The Larger Bench of the Tribunal in the case of M/s Shiv Kripa Ispat Pvt. Ltd (2009 (1) TMI 124 - CESTAT MUMBAI) held that the goods cannot be confiscated when not available, redemption fine is not imposable. - The confiscation and imposition of redemption fine are set aside. - Decided partly in favour of assessee.
Issues:
1. Demand of duty, interest, and penalty on the appellant. 2. Confiscation of goods and imposition of redemption fine. 3. Penalty imposed on the director of the appellant company. Analysis: Issue 1: Demand of Duty, Interest, and Penalty The case involved M/s Rishabhdev Techocable Ltd, a manufacturer of Electric Cable Wires, facing a demand of duty, interest, and penalty by the Central Excise Officers. The appellant paid the demanded amount to avoid legal complications. The Adjudicating authority confirmed the demand of duty, which was paid by the appellant. The Commissioner (Appeals) upheld the Adjudication order. The appellant did not contest the demand of duty but argued that the penalty should have been reduced under Section 11AC of the Central Excise Act, 1944. The Tribunal agreed that the penalty on the director was excessive, considering Section 11AC was invoked on the appellant company. The impugned order was modified, upholding the demand of duty and penalty but providing an option to pay 25% of the duty as per Section 11AC. Issue 2: Confiscation of Goods and Redemption Fine The Adjudicating authority confiscated the goods and imposed a redemption fine, even though the goods were not available for confiscation. The Tribunal held that confiscation and imposition of redemption fine were not sustainable when the goods were not available. Citing relevant case laws, the Tribunal set aside the confiscation and redemption fine, aligning with the principle that goods cannot be confiscated when not available. Issue 3: Penalty on the Director The penalty imposed on the director of the appellant company was contested, with the Revenue arguing it was justified due to his involvement in clandestine activities. However, the Tribunal found the penalty excessive, especially when Section 11AC was invoked on the appellant company. Considering both sides' arguments and case laws cited, the Tribunal reduced the penalty on the director to a nominal amount of Rs. 50,000, emphasizing that the penalty should be proportionate to the circumstances. In conclusion, the Tribunal modified the impugned order, maintaining the demand of duty and penalty but providing an option for reduced penalty payment under Section 11AC. The confiscation of goods and imposition of redemption fine were set aside, and the penalty on the director was significantly reduced. The judgment highlighted the importance of proportionality in imposing penalties and the legal principles governing confiscation when goods are not available.
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