2018 (4) TMI 293 - HC - Central Excise

Clandestine manufacture and removal - confiscation - penalty - Held that - On both occasions, at the first stage, as well as on remand, accepting the contention of the assessee M/s. Southern Press Tools, Coimbatore, the Tribunal has arrived at a categorical finding that there is no manufacturing activity and accordingly, allowed the appeals filed by the dealers - appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Alleged clandestine removal of goods without payment of duty.
2. Confiscation of seized goods and imposition of penalties.
3. Appeal against the order of the CESTAT.
4. Dispute regarding the existence of a factory and manufacturing activity.

Detailed Analysis:
1. The case involves allegations of clandestine removal of goods without payment of duty by the respondent, a manufacturer of tools and components. The officers found that the respondent was manufacturing branded radiators without maintaining proper accounts and clearing goods without duty payment. The demand for duty payment, confiscation of seized goods, and imposition of penalties were made under relevant provisions of the Central Excise Act.

2. The demand, confiscation, and penalties imposed on the respondent were confirmed through various orders. The respondent appealed these decisions before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which remanded the case for re-evaluation. Subsequent orders confirmed the duty and penalties, leading to further appeals by both parties.

3. The Tribunal, in its final orders, allowed the appeals filed by the respondent and another party, leading to dissatisfaction from the department. The matter was escalated to the Hon'ble Supreme Court, which directed a review based on legal precedents. The High Court, in response to the Supreme Court's directions, remanded the case back to the Tribunal for further consideration.

4. The key issue in the instant Civil Miscellaneous Appeal was the dispute regarding the existence of a factory and manufacturing activity by the respondent. The Tribunal, in its final order, concluded that there was no factory or manufacturing activity, which was challenged by the appellant in the High Court. The High Court, after considering the arguments, dismissed the appeal, stating that the findings of fact by the Tribunal were not perverse and did not warrant interference. The appeal was dismissed without costs.

This detailed analysis covers the issues related to the alleged clandestine removal of goods, confiscation and penalties, the appeal process, and the dispute over the existence of a factory and manufacturing activity, as outlined in the legal judgment from the Madras High Court.