Redemption duty liability on consignee failed where manufacturer's duty was already confirmed and transaction was bona fide.

A consignee was not required to pay duty on redemption where duty had already been confirmed against the manufacturer and the consignee's transaction was bona fide. The CESTAT noted that the consignee was not responsible for the manufacturer's improper debit of duty through the CENVAT account instead of the PLA, and relied on the Board's circular stating that recovery of CENVAT credit from a bona fide consignee was not warranted in such circumstances. As the redemption demand could not be sustained, confiscation of the goods and the related redemption fine were also set aside.

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Issues: Whether the consignee-appellant was liable to pay duty on redemption of the goods and whether confiscation and redemption fine were sustainable when duty had already been demanded from the manufacturer and the bona fide nature of the transaction was not in dispute.

Analysis: The duty liability had been confirmed against the manufacturer, and the consignee was not concerned with the manufacturer's infraction in debiting duty through the CENVAT account instead of the PLA. The Board's circular clarified that action against the consignee to reverse or recover CENVAT credit need not be taken where the bona fide nature of the consignee's transaction is not disputed. On that basis, the redemption demand against the consignee could not be sustained. In the same factual setting, confiscation of the goods and the associated redemption fine were also unwarranted.

Conclusion: The consignee-appellant was not liable to pay duty on redemption, and the confiscation and redemption fine were set aside.

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