2018 (3) TMI 616 - AT - Central Excise

Provisional release of goods - confiscation - Held that - panchnama itself reveals that goods were in the shape of castings which means the same was raw materials - confiscation set aside. Penalty - Held that - the facts on record reveal that the appellant was doing the job work for the other principal manufacturer without following the due procedure for the same - The goods manufactured by them on job work basis were being sent to the principal manufacture, without the cover of any invoice. This act on the part of the assessee, amounts to aiding and abetting the principal manufacturer for their clandestine activity, in which scenario, a token penalty is required to be imposed on them - quantum of penalty reduced. Appeal allowed in part.

Summary

Issues:
1. Confiscation of goods and imposition of redemption fine.
2. Imposition of penalty under Rule 25.

Confiscation of Goods and Imposition of Redemption Fine:
The appellant, engaged in manufacturing automobile parts, had goods confiscated by officers during a visit to their factory. The appellant clarified that they received articles from motor vehicle parts manufacturers for job work without proper documentation. The appellant admitted to not following the notification procedure for job work. The proceedings led to confiscation of goods with an option to redeem on payment of &8377; 90,000. The Commissioner (Appeals) upheld this decision. The advocate for the appellant argued that the goods were raw materials or semi-processed goods, citing a Punjab and Haryana High Court decision. The Tribunal noted that the goods were in the shape of castings, indicating raw materials, and set aside the confiscation based on the High Court decision.

Imposition of Penalty under Rule 25:
The appellant was found to be doing job work for a principal manufacturer without following due procedure, sending goods back without proper documentation. This conduct was seen as aiding the principal manufacturer in clandestine activity, warranting a penalty. The Tribunal upheld the imposition of penalty but reduced it to &8377; 15,000, considering the appellant's role in aiding the principal manufacturer. The appeal was allowed with the modification in the penalty amount.

This judgment highlights the importance of following proper procedures in job work activities and the consequences of aiding clandestine activities. The Tribunal's decision was based on the nature of the goods involved and the appellant's actions in the manufacturing process.