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TMI Blog2019 (4) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... record that the appellant are not the manufacturer and are only trader, therefore, in the absence of identifying who is manufacturer of goods, it cannot be held that the Indian currency recovered from the possession of the appellants is the sale proceeds of clandestine manufacture and cleared cigarettes. Seizure of Indian Currency - Held that:- The Indian currency has been seized under Section 121 of Customs Act, 1962 which were made applicable to Central Excise matters vide Notification No. 68/63-CE dated 04.05.1963, issued under Section 12 of the Central Excise Act, 1944 - he Indian currency can be ordered for confiscation is only in terms of Section 111, 113 and 125 of Customs Act, 1962 which were not made applicable in terms of Notification No. 68/63-CE dated 04.05.1963. Therefore, the Indian currency seized cannot be confiscated under Section 121 of the Customs Act, 1962 - The currency seized is required to be released to the appellants and seized goods cannot be held liable for confiscation - no penalty is imposable on the appellants. Appeal allowed - decided in favor of appellant. - Appeal No. E/54332/2015, E/50023/2016 - A/60390-60391/2019 - Dated:- 9-4-2019 - Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orth ₹ 19 lakhs was also seized as being related to sale proceeds of clandestinely cleared cigarettes. 3. This statement was, however, retracted by Shri Adwani immediately, vide affidavit dated 22.01.2013. 4. In follow up action, the residential premises of Shri Samaylal Janghel Railway Booking Agent, Raipur, were searched on 16.01.2016 and Indian currency worth ₹ 2.25 Crores found there were seized on the ground that they were the sale proceeds of illicit sale of cigarettes. 5. In his statement dated 16.01.2013, Shri Samaylal Janghel (the appellant), inter-alia, admitted that he was engaged in the business of booking clandestinely cleared cigarettes for the last three years and that the amount of ₹ 2.25 Crores seized from his premises were the sale proceeds of such cigarettes. He admitted that he knew Shri Ajay Adwani of Shraddha Traders and that he also procured cigarettes from M/s Rudra Ventures Pvt. Ltd, Ludhiana. 6. The appellant retracted his statement the very next day through an affidavit dated 17.01.2013 (pg-929, PB, Vol-2). 7. During investigations, some transportbilties of a transporter, M/s Pankaj Logistics, having offices in New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Shraddha Traders of Shri Ajay Adwani belongs to M/s Rudra Ventures Pvt. Ltd from whom the demand has also been confirmed in the impugned order, but, the order of demanding duty from M/s Rudra Ventures Pvt. Ltd. has been set-aside by this Tribunal reported in 2016 (344) ELT 472 (Tri.-Chan.). Therefore, the demand on account of clandestine clearance against the manufacturer has been set-aside. Therefore, the seized Indian currency recovered from the appellant cannot be the sale proceeds of the clandestine cleared the goods. He further submits that at the time of investigation, the Indian currency was seized and the statement of the appellant was recorded. The appellant retracted his statement very next day and thereafter no inculpatory statements were recorded, in that circumstances, without any evidence against the appellant, the Indian currency seized during the course of investigation cannot be the sale proceeds of the clandestine cleared of goods. He further submits that a separate show cause notice was issued to M/s Shradha Traders wherein the goods valued at ₹ 10,94,004/- were confiscated and this Tribunal vide final order reported in 2017 (347) ELT 367 (Tri.-Del. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eds thereof cannot be ordered absolute confiscation and impugned order to this effect is bad in law. The provisions of Rule 25 of the Rules applies to any producer, manufacturer, registered person, or importer who issues an invoice or registered dealer. The appellant was not producer, manufacturer, importer or registered dealer, accordingly, the provision of Rule 25 not applicable to him and therefore, confiscation of currency is bad in law. It is added that confiscation provisions are only under rule 25 of the Rules. The appellant being trader fall under provisions of Rule 26 and there is no confiscation provision stipulated like Rule 25 under Rule 26 of Rules. Therefore, he prayed that the impugned order is to be set-aside. 5. On the other hand, the Ld. AR opposed the contention of the Ld. Counsel and submits that cigarettes as well as cash on account of sale proceeds of cigarettes were recovered during the course of search and the bills were not found for cigarettes in question and nowhere these goods have been entered. Therefore, the appeals are merits dismissal. With regard to confiscation of currency recovered from M/s Samaylal Jhangel, it is submitted that the cigarett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Pankaj Logistics is disclosing the fact that they were transporting the cigarettes manufactured by the IGM Group of companies from Delhi to Raipur but did not disclose the name of the appellant. The only reason to implicate the appellant in this case is the statement of Sh. Ravi Singhal and it has been presumed by Revenue that the said goods have been manufactured by the appellant and cleared clandestinely. As the appellant unit was in physical control of the Central Excise Department and nothing incriminating was recovered from the appellant and the officer incharge of factory of the appellant were never investigated in that circumstances, the charge of clandestine removal of goods is not sustainable. The allegation has been made on the basis of assumption and presumption, no statement of the appellant was ever recorded, none of the person whose statement were recorded and relied has implicated the name of the appellant. Merely, as the goods recovered from a trader, it is alleged that the goods have been cleared by the appellant clandestinely. In the absence of evidences namely procurement of raw material, the manufacturing process, flow back of money, mode of transportation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities who issued transport permits for the assessee to remove molasses to their distillery. The least that the department could have done in this case is to cross check with the State excise authorities and the records maintained by them to satisfy, whether, indeed, there has been production and clearance of the molasses to the extent of 12539.300 MTs as made out in the show cause notice which has not been done in the instant case. Further, molasses has to be produced out of crushing of sugarcane. To produce the quantity of molasses alleged to have been clandestinely produced and removed, the assessee should have procured 3,41,732.115 MTs of sugarcane. Such huge quantity could not have been procured by anyone without documentation relevant to their purchase, transport, payment and so on. No investigation worth the name has been conducted by the department in this regard. Further, as rightly pointed out by the assessee, to crush this much quantity of sugarcane the factory should have worked additionally for about 128 days, which means there will be consumption of electricity, other fuels, employment of workers and payment of wages to these workers. None of these aspects has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a fact on record that Revenue has failed to establish that who is the manufacturer of clandestine cleared the goods and no duty is sustainable on account of clandestine cleared goods as per the order of this Tribunal as discussed above and it is a fact on record that the appellant are not the manufacturer and are only trader, therefore, in the absence of identifying who is manufacturer of goods, it cannot be held that the Indian currency recovered from the possession of the appellants is the sale proceeds of clandestine manufacture and cleared cigarettes. Further, the Revenue has failed to identify that the cigarettes recovered from the appellants are clandestine removed without payment of duty, in that circumstances, the currency cannot be seized without identifying the manufacture of the goods. 8. Further, we find that the Indian currency has been seized under Section 121 of Customs Act, 1962 which were made applicable to Central Excise matters vide Notification No. 68/63-CE dated 04.05.1963, issued under Section 12 of the Central Excise Act, 1944. We find that the Indian currency can be ordered for confiscation is only in terms of Section 111, 113 and 125 of Customs Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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