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TMI Blog2013 (8) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... ely because in the statement, the Commercial Manager of the petitioners has stated that the goods were manufactured that by itself cannot be a ground for holding that the goods were ready for despatch to the customer - The confiscation of the goods ordered by the lower authorities is liable to be set aside - Question of imposing penalty either on the appellant-assessee or its partner does not arise – Decided in favor of Assessee. - Appeal No.E/1531, 1535-1536/2010; E/CO/185/2010 - A/10108-10111/2013-WZB/AHD - Dated:- 17-1-2013 - MR. M.V. RAVINDRAN, J. For the Appellant: Shri S.J. Vyas, Adv. For the Respondent: Shri P.N. Sarvaiya, A.R. JUDGEMENT Per: M.V. Ravindran: Appeal No.E/1531/2010 is filed by the Revenue against Order-in-Appeal No. SKSS/25-27/DMN/2010-11, dt.14.07.2010 for non-confirmation of equal amount of penalty while the Appeal Nos. E/1535, 1536/2010 are filed by M/s M.B. Laminators and Shri Sandeep Morwal, the partner of M/s M.B. Laminators against the very same Order-in-Appeal, which has upheld the confiscation of the seized goods with an option to redeem the same on payment of redemption fine and penalties on them. The cross objection is filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sugar factories and fertilizer companies, who depute their personnel to the appellant-assessee s factory and do the checking of the finished goods which are ready for dispatch and on such checking and confirmation of the quality, dispatches take place. It is his submission of the ld. Counsel, that many a times, the checking done by the fertilizer companies or sugar factories, results in re-doing of the goods and hence the goods are not accounted for in the statutory books. It is his submission that there is absolutely no other allegation as to the said goods were kept in readiness for clearing the same clandestinely. It is his submission that the input stock was checked and found tallying and nothing was a miss in other records. He would rely upon the judgment of Hon'ble High Court of Mumbai in the case of Supreme Industries Ltd 2007 (214) ELT 187 (M.P.) for the proposition that in such a case, where the goods are ready, but waiting for quality control clearance, non-accountal thereof cannot be considered as violation of Rule 173Q of erstwhile Central Excise Rules, 1944 and Rule 25 of Central Excise Rules, 2002. It is his submission that the entire raw material which was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had availed the CENVAT Credit of amount of duty discharged by the EOU indicated in the invoices. It is a fact that the statute provides for availment of CENVAT Credit of such duty paid by the EOU on a formula which the appellant did not apply. At the same time, it is the claim of the assessee that they were not aware of such provision of Rule 3 of CENVAT Credit Rules, 2004, could be a factual situation as the appellant-assessee, on being pointed out of in-eligibility of CENVAT Credit, reversed the same along with interest. In my view, the findings of the first appellate authority that there was no willful suppression or mis-statement of facts with an intention to evade duty in this case as the invoices issued by EOU total amount indicated the total amount as an amount of duty paid by them. In my considered view, the first appellate authority was correct in coming to conclusion that the amount of penalty imposed on the appellant should be Rs.10,000/-. In view of the foregoing, I find that the Revenue s appeal in seeking enhancement of the penalty equal to the amount of CENVAT Credit ordered to be reversed is de-void of merits and is rejected. 10. As regards the confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory, there is neither any material to show that there was intention to evade duty, on the contrary, the evidence that has come on record only indicates that the goods were not subjected to quality control test and they were kept on hold, they were to be cleared by the quality control department and only thereafter were to be sent to the packing department after the quality control test was concluded. In such circumstances, the revenue, in the present case has not acted in a reasonable manner in the matter of enforcing the penal clause against the petitioner. Enforcement of penal clause has to be done subject to strict proof of intention to evade payment of duty. In the present case, neither intention to evade duty is established nor is there any material to establish the same and on the contrary the explanation of the petitioners and the fact that the material was not subjected to quality control test has been totally ignored. Merely because in the statement, the Commercial Manager of the petitioners has stated that the goods were manufactured that by itself cannot be a ground for holding that the goods were ready for despatch to the customer. The learned Tribunal incorrectly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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