2005 (2) TMI 695 - AT - Central Excise

CESTAT Chennai: Confiscation Order Overturned for Unrecorded Yarn; Lack of Evidence

The Appellate Tribunal CESTAT, Chennai, set aside the order for the confiscation of 500 Kgs of yarn not entered in the appellants' books of accounts. The ... Confiscation - Non-accountal in books of accounts Issues:Confiscation of 500 Kgs of yarn not entered in the books of accounts - Justification for penal action - Evidence of clandestine removal - Proper seizure, confiscation, and imposition of redemption fine - Demand of duty in the order - Presence of appellants during the proceedings.Confiscation of Yarn:The appeal was against the confiscation of 500 Kgs of yarn not recorded in the appellants' books of accounts during a visit by Central Excise Officers. The appellants explained the omission was due to the absence of the in-charge person during Pongal. They argued that the goods were available in the factory, with no evidence of clandestine removal. The appellants contended that there was no mala fide intention and cited relevant case laws to support their case.Justification for Penal Action:The appellants argued that there was no justification for penal action as the goods were present in the factory, and there was no evidence of attempting to remove them without payment of duty. They highlighted that the partner had provided reasons for the discrepancy in stock during the officer's visit. The show cause notice did not propose a demand for duty, leading to a challenge regarding the demand in the original and subsequent orders.Proper Seizure and Confiscation:The Tribunal noted the absence of any material on record contradicting the appellants' submissions. After perusing the records and hearing the JDR, the Tribunal concluded that the impugned order was not justified based on the facts and circumstances of the case. Consequently, the Tribunal set aside the order and allowed the appeal.Presence of Appellants:Notably, none was present for the appellants during the proceedings. Despite their absence, the Tribunal considered the submissions and found them to be valid, leading to the decision in favor of the appellants. The judgment was dictated and pronounced in open court by the presiding judge, Shri C.N.B. Nair.In summary, the judgment by the Appellate Tribunal CESTAT, Chennai, addressed the issues of confiscation of unrecorded yarn, justification for penal action, proper seizure and confiscation, and the absence of the appellants during the proceedings. The Tribunal ruled in favor of the appellants, setting aside the impugned order due to the lack of material contradicting the appellants' explanations and arguments.