2017 (9) TMI 216 - AT - Central Excise

Clandestine removal - Confiscation of goods - Held that - Though, Ld. Commissioner (Appeals) has dropped the demand of duty, interest and penalty for the period prior to 01.03.2008, however, directed confiscation of the goods seized which were cleared from the factory prior to 01.03.2008, and found in the premise of the trader and seized under the reasonable belief that appropriate duty has not been paid on the said goods. The said confiscation and personal penalty on the trader, in my opinion is erroneous and cannot be sustained - since the total demand of duty has been reduced from 30,31,383/- to ₹ 4,93,093/-, appellant are entitled to discharge 25% of the penalty equal to the duty, subject to the fulfilment of conditions laid down under section 11AC of CEA 1944 - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
- Confiscation of goods and imposition of penalty
- Reduction of penalty based on demand of duty
- Remand of matter to lower adjudicating authority

Confiscation of goods and imposition of penalty:
The case involved appeals against a common order-in-appeal passed by the Commissioner (Appeals) of Central Excise, Customs, and Service Tax-Rajkot. The appellants, engaged in manufacturing ceramic tiles, were subjected to MRP based assessments. The Directorate General of Central Excise Intelligence initiated an investigation due to suspected duty evasion, resulting in two show cause notices. The adjudicating authority directed the confiscation of seized goods and imposed penalties. The Ld. Commissioner (Appeals) set aside the demand of duty but confirmed the confiscation of goods and penalties. The tribunal found the confiscation and personal penalty erroneous and unsustainable, especially since the total demand of duty had been reduced significantly. The tribunal ruled in favor of the appellants, allowing some appeals and modifying the impugned order.

Reduction of penalty based on demand of duty:
The Ld. Advocate for the appellants argued that the penalty should be reduced by 25% as the demand of duty had decreased substantially. The tribunal agreed with this argument, stating that the appellants were entitled to discharge 25% of the penalty, subject to fulfilling the conditions under Section 11AC of the Central Excise Act, 1944. The tribunal found merit in this contention and adjusted the penalty accordingly in favor of the appellants.

Remand of matter to lower adjudicating authority:
The Ld. Commissioner (Appeals) had remanded the matter to the adjudicating authority for reconsideration of determining the RSP post a specific date. The tribunal upheld this decision and modified the impugned order accordingly. The appeals related to different show cause notices were allowed or disposed of based on the tribunal's findings and modifications to the original order.

In conclusion, the tribunal addressed the issues of confiscation of goods, reduction of penalty based on demand of duty, and the remand of the matter to the lower adjudicating authority. The tribunal found errors in the original order, ruled in favor of the appellants on certain aspects, and modified the impugned order accordingly.