2019 (4) TMI 474 - AT - Central Excise

Clandestine manufacture and removal - confiscation of the goods which was seized after the searches made at the appellant s factory and various other premises including trading premises - Held that - The entire duty for the manufactured goods during the said period stands paid by the appellant alongwith the interest and penalty to the extent of 15% and the same has been concluded by the department there is no legality and propriety of the order which has been passed by the learned Commissioner (Appeals) - further the CBEC has also clarified the same in its Circular F. No. 137/46/2015 - Service Tax dated August 18, 2015. Appeal allowed - decided in favor of appellant.

Summary

Issues: Confiscation of seized goods, Closure of case based on Section 11 AC (1) (d) of the Central Excise Act, 1944

Confiscation of Seized Goods:
The case involved the confiscation of goods seized from the appellant's factory and other premises. The appellant, engaged in manufacturing chocolate products, cleared goods without paying duty under the claim of SSI benefit. The Revenue found the appellant ineligible for the benefit after intelligence operations. The investigation resulted in two aspects: seizure of unaccounted goods cleared by the appellant and past clearances based on documents. A show cause notice was issued, leading to an adjudication order and an appellate order. During the appeal process, the appellant sought closure under Section 11 AC (1) (d) of the Excise Act. The closure report indicated the duty, penalty, and interest deposited by the appellant, which the competent authority accepted, leading to confusion regarding the closure's scope.

Closure of Case under Section 11 AC (1) (d):
The appellant approached the department seeking closure of the case under Section 11 AC (1) (d) of the Excise Act, which was accepted by the competent authority. However, the Commissioner (Appeals) did not consider this closure and upheld the impugned order. The Revenue argued that the closure order lacked clarity on the proceedings' closure and the inclusion of the demand portion related to the seizure. The appellant contended that since the closure pertained to the years in question, the goods seized were naturally included. The closure report detailed the production and clearance by the appellant during 2013-2014 and 2014-2015.

Analysis and Conclusion:
The Tribunal analyzed the closure report, confirming that the duty for the relevant period had been paid by the appellant along with penalties and interest, as concluded by the department. Referring to a CBEC Circular, the Tribunal noted that the conclusion of proceedings could be approved by an officer of equal rank without the need for an adjudication order. The Circular clarified that the sum total of all issues arising from the same proceedings should be considered for conclusion. Based on this, the Tribunal found no justification for the Commissioner (Appeals)'s order and set it aside, allowing the appeal with consequential benefits. The judgment highlighted the legality and propriety of the closure under Section 11 AC (1) (d) and the need for clarity in the closure process, ultimately ruling in favor of the appellant.