Duty-paid goods of another manufacturer in factory premises did not justify confiscation or penalty under excise rules.

Duty-paid goods manufactured by another unit and brought into an assessee's factory, where they are different from the goods manufactured in that factory, do not by themselves justify confiscation or penalty under the Central Excise Rules. The Tribunal rejected the view that permission requirements applied only where both units belonged to the same manufacturer, and held that the appellant's request to receive branded goods for removal with its own products was not invalid merely because one supplier was not named. Since the goods were covered by invoice and were admittedly duty-paid, confiscation and penalty were not warranted.

---

---

Issues: Whether duty-paid goods manufactured by another unit and stored in the appellant's factory premises, being goods different from those manufactured by the appellant, could be treated as a violation of the Central Excise Rules so as to justify confiscation and penalty.

Analysis: The goods were admitted to be duty-paid and covered by an invoice in the name of the other manufacturer. The appellant was not manufacturing such goods in its own factory and had sought permission to receive branded goods of other manufacturers for removal along with its own products. The reasoning that the Board's circular applied only where both units belonged to the same manufacturer was rejected. The appellant's request was not rendered invalid merely because the name of one supplier was not mentioned in the request. The Tribunal also followed the principle that receipt of duty-paid goods of another manufacturer, which are different from the goods manufactured in the factory, does not attract penalty. The trade notice relied upon also indicated that permission requirements were confined to goods manufactured by the assessee or similar goods.

Conclusion: Confiscation of the impugned goods and imposition of penalty were not justified.

Final Conclusion: The appellant was entitled to relief and the impugned order was set aside.

Ratio Decidendi: Where duty-paid goods of another manufacturer, different from the goods manufactured in the assessee's factory, are brought into the factory premises for legitimate commercial purposes, confiscation and penalty are not warranted merely for want of permission under the cited excise rules.

---