2018 (7) TMI 1207 - AT - Central Excise

Clandestine removal - Cigarettes - Confiscation - Held that - 15, 000 cigarettes which were lying within the factory premises were not contravening goods and had not violated any provision of Central Excise Act and therefore their confiscation is set aside. Confiscation of goods at the premises of transporters and traders - Held that - In respect of other goods which were confiscated such as at the transporter premises of Baba Roadlines and at trading premises of Ganesh Trading and at Varanasi Cantt. Railway Station the redemption fine cannot be directed to be paid by the appellants because said goods were not moved to have been manufactured by the appellant - demand do not sustain. Cigarettes found in excess at the residential premises of Shri Roop Singh - Held that - In respect of 2, 88, 000 sticks of Captan brand cigarettes stated to have been found in excess at the residential premises of Shri Roop Singh it can be very clearly inferred that they cannot be contravening goods because the manufacturers factory was under physical control and it was not possible to remove manufactured goods without payment of duty - demand do not sustain. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Confiscation of cigarettes found within the factory premises
- Confiscation of cigarettes found at transporter premises and trading premises
- Confiscation of cigarettes found at residential premises
- Request for cross-examination of witnesses
- Imposition of penalties on individuals

Confiscation of cigarettes found within the factory premises:
The case involved the confiscation of 15,000 loose cigarettes found within the factory premises of the appellant. The officers seized these cigarettes as they were not entered into the RG-1 register. The Tribunal ruled that these cigarettes were not contravening goods and had not violated any provision of the Central Excise Act. The confiscation was set aside, stating that these goods should have been recorded in RG-1 for duty payment upon clearance.

Confiscation of cigarettes found at transporter premises and trading premises:
Cigarettes were seized at various locations like transporter premises, trading premises, and railway stations, with allegations that they were manufactured by the appellant. The Tribunal held that the redemption fine cannot be imposed on the appellants for these goods as they were not proven to have been manufactured by them. Consequently, the confiscation of these goods was deemed unjustified.

Confiscation of cigarettes found at residential premises:
A large quantity of cigarettes was found at the residential premises of an individual associated with the appellant. The Tribunal inferred that these cigarettes could not be contravening goods due to the physical control at the manufacturer's factory. It was deemed implausible to remove manufactured goods without paying duty. Therefore, the confiscation of these cigarettes was set aside.

Request for cross-examination of witnesses:
The appellants had requested cross-examination of persons whose statements were relied upon for the show cause notice. The Tribunal did not address this issue specifically in the judgment.

Imposition of penalties on individuals:
The Original Authority had imposed penalties on individuals associated with the appellant. However, the Tribunal allowed the appeals, setting aside the impugned Order-in-Appeal. The appellants were granted consequential relief as per the law. The judgment highlighted the importance of physical control in determining the liability for duty payment and confiscation of goods.