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TMI Blog2018 (7) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings conducted at above mentioned places is detailed below: M/s Real Industries Coating, A-14, Gali No.6, Libaspur, Delhi 2.1 Raw Material valued at Rs. 7,90,702/- and finished goods viz. Industrial paint/rubber seal valued at Rs. 4,76,096/-, total valued at Rs. 12,66,798/- found lying there were seized as Sh. Ram Lalit Shah, Production Supervisor at the said premises could not produce the proper documents towards manufacture and accountal of the said raw material/finished goods. CPU of the computer installed and the documents relevant to the investigations were also resumed for further investigations. Sh. Ram Lalit Shah in his statement stated that the company was manufacturing REAL, MARS, CHARMINAR, IKKA, NICE brand paints and rubber seal of REAL brand, that the procurement of raw material and clearance of finished goods was looked after by the owner of the company Sh. Gulshan Matta. M/s Real Paint India, 291-292, HSIDC, Ind.Area, Rai, Sonepat 2.2 At the time of visit, Sh. Rajeev Juneja, Supervisor was present in the premises where he informed that the firm was engaged in manufacturing of paints and resin, that they were not registered with Central Excise. Upon phy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the goods manufactured in his factory which was made in Kacchi Parchies (loose slips). He admitted that the goods manufactured in his factory at Sonepat and at Libaspur, Delhi were cleared 60% on bills and 40% on Kacchi Parchies (loose slips); that the amount of the goods cleared on Kacchi Parchies (loose slips) was received in cash. He submitted 4 cheques of Rs. 7,50,500/- each total Rs. 30,00,000/- on his and his father's behalf and stated that the cheques may be used against their duty liability and also the amount of Rs. 12,50,500/- recovered from his trading firm may also be utilised towards duty liability. He also undertook to take registration for M/s Real Paints India, Sonepat and M/s Real Industrial Coatings, Delhi. Premises at A-791/1, Shastri Nagar, Delhi 2.5 Shri Rambaksh, Landlord of the said premises was present at the time of visit of the Central Excise of officers. Certain documents, relevant to the investigations were taken into possession by the visiting officers. Finished goods valued at Rs. 4,17,204/- lying in the said premises were seized by the visiting officers on the reasonable belief that the said goods were being possessed without any proper central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the finished goods in violation of the provisions of Central Excise Act, 1944 and the rules made thereunder and thus appeared to had contravened the provisions of Rule 4,6,8,9, 10 & 11 of the Central Excise Rules by their acts of omission and commission. Accordingly, the main appellant M/ss. Real Paint India, Rai, Sonepat were issued Show Cause Notice C. No.CE-20/Tech/SCN/Real Paint/16/K/12 dated 07.03.2012 proposing confiscation of raw material valued at Rs. 21,65,598/-, packing materials valued at Rs. 84,090/-- and finished goods valued at Rs. 8,02,434/-, collectively valued at Rs. 30,52,122/-. Penal action was also proposed against them under Rule 25 of the Central Excise Rules,2002. 4. During search on 13.09.2011 and 15.09.2011, the following goods were seized at various premises as details given below:- Details of the premises Description of the goods Detained/seized Value of the detained/seized goods Remarks M/s. Real Industrial Coating, A-14, Gali No.6, Libaspur, Delhi Residence premises at 6/2, Roop Nagar, New Delhi Finished goods valued at Rs. 4,76,096/- and raw material valued at Rs. 7,90,702/- 12,66,798/- Seized M/s. H.R.Paints, 1618,Street No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 3,25,000/-. Penalties were imposed on the other parties under Rule 26 of the Central Excise Rules. Penalty was also imposed on the appellant under Rule 25 of the Rules. 6. The appellant went in appeal before the Commissioner (Appeals). In his order dated 10.1.2018, the Commissioner (Appeals) reduced the demand to Rs. 3,89,650/- by allowing benefit of SSI exemption on cumulative value of the total clearances, deduction of value of raw material cleared on which no Cenvat credit was availed and VAT/ST was paid, and reduced penalty under Section 11AC equal to reduced central excise liability. Penalty under Rule 25 on the appellant was set aside. Penalties on the other parties were upheld. Confiscation of raw material, packing material and finished goods collectively valued at Rs. 30,52,122/- was also upheld along with redemption fine of Rs. 3,25,000/- in lieu of confiscation imposed by the adjudicating authority. Aggrieved from the order of the Commissioner (Appeals), the appellant have filed this appeal. 7. Ld. Advocate for the appellant submits that their only challenge is to the confiscation of raw material, packing material and finished goods collectively valued at Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were found and the statements of various persons were recorded. It emerged that there was a ratio of 60% to 40% between accounted clearances and unaccounted clearances. The findings of the Commissioner (Appeals) in relation to appellant that they had crossed SSI turnover limit, existence of kachcha parchis and penalties imposed on the appellant and other persons are not being challenged by the appellant. The appellant are only contesting confiscation of raw material, packing material and finished goods and imposition redemption fine. It clearly shows that the appellant have accepted that there was clandestine removal of the goods and there was malafide intent to evade payment of duty. 11. On the issue of confiscation of raw material and packing material, it is admitted fact that no Cenvat credit has been taken by the appellant. In that situation, there is force in the contention of the appellant that there is no provision in the Central Excise Act for confiscation of such raw material and packing material. Ld. AR could not show such a provision. In this context, it was held by the Hon'ble Punjab & Haryana High Court in the case Annapurna Impex Pvt.Ltd. (supra) as follows: "1.Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stine removal of the goods. The appellant had already crossed turnover limit of SSI exemption. They did not get themselves registered with the Central Excise Department even after crossing turnover value of Rs. 150 lakh. The appellant have also not produced any documentary evidence in support of their contention that the said goods were duly accounted in their books of accounts. From the statement of Shri Rajeev Juneja, Supervisor and Shri Gulshan Kumar, Proprietor of M/s. Real Paints India, it is clear that the appellant had been systematically clearing the goods without payment of duty in clandestine manner. In these circumstances, reasonable conclusion is that the appellant wanted to remove finished goods in clandestine manner in active connivance with his close relatives as they had already crossed SSI exemption limit. Hence, I do not find any infirmity in the order of the Commissioner (Appeals) upholding confiscation of the finished goods and imposing redemption fine. Since the value of the finished goods is Rs. 8,02,434/-, redemption fine is accordingly reduced to Rs. 80,000/-. 15. In the result, (i) confiscation of raw material and packing material is set aside, (ii) conf ..... 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