2016 (4) TMI 282 - AT - Central Excise

Confiscation of seized goods - Rule 25 of the Central Excise Rules, 2002 - Manufacture of Khandsari Sugar - In January 2005 appellant put up a boiler and vaccum pan for manufacture of sugar. After enquiry the stock of sugar in the factory and the state warehousing corporation and molasses in the factory were seized - Held that - There is no determination of any duty liability or any violation of the provisions which will occur on such duty liability not being discharged. Regarding non-registration after switching over to khandsari sugar to vaccum pan based sugar production it is the case of the appellant that the said registration is required after reaching threshold limit of turnover for duty liability only. It is found that the seizure was effected and the Department proceeded with a prima facie belief of possible non-payment of duty on sugar as well as violation of provisions relating to registration of the unit etc. None of these purported violations stand decided when the Original Authority confirmed the correctness of seizure and ordered the confiscation. Also there is no justification of such action without a clear finding about the violations committed by the appellant. More specifically the liability of the appellant to Central Excise duty itself has not been established categorically. In these circumstances, the impugned order is not sustainable and accordingly, set aside. Matter is remanded back to the original authority to examine the evidences regarding violation, if any, of various provisions of law by the appellant, their duty liability, if any, during the impugned period which will be relevant to decide the correctness of confiscation. - Appeal disposed of

Summary

Issues: Seizure and confiscation of goods, penalty imposition without finding on duty liability

In this case, the appeal was made against the order of the Commissioner (Appeals) Central Excise- Bhopal regarding the seizure and confiscation of sugar and molasses from the appellants' factory. The officers of Central Excise seized the goods after conducting inquiries in 2005. The Original Authority ordered the confiscation of the seized goods with a redemption fine and penalties imposed on the appellant and the Director of the company. On appeal, the Commissioner (Appeals) modified the redemption fine and penalties. However, the proceedings did not address the liability of duty or quantification of duty payable by the appellant. The Ld. Commissioner observed that the eligibility for small scale exemption would be premature until further investigations were completed. The appellants argued that they were eligible for exemption and had not violated any provisions of the law justifying the seizure and confiscation. The Tribunal found that there was no clear finding on the violations committed by the appellant, and the liability to Central Excise duty was not established. Therefore, the order of confiscation was deemed unsustainable, and the matter was remanded to the original authority for further examination of evidence regarding violations and duty liability. The appellants were granted an opportunity to present their case in light of the remand. The appeals were disposed of accordingly.