Seizure of excisable goods inside the factory does not amount to removal under Rule 9(1), defeating duty demand.

Seizure of excisable goods lying inside the factory did not amount to removal for the purposes of Rule 9(1) of the Central Excise Rules, 1944, where the goods were found within the factory and duly entered in the RG-I register. The absence of actual removal, or even an attempt to remove the goods, meant duty could not be demanded merely because a State Forest Department seized them. The note states that the earlier orders dropping the demand were correct and that confirmation of duty on this basis was unsustainable.

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Issues: Whether seizure of excisable goods lying within the factory by the State Forest Department could be treated as removal from the factory so as to attract duty under Rule 9(1) of the Central Excise Rules, 1944.

Analysis: The goods were found to be within the factory and duly entered in the RG-I register. There was no actual removal of the goods from the factory, nor any attempt at such removal. Seizure by the State Forest Department did not amount to removal within the meaning of Rule 9(1). The earlier orders dropping the demand on the same footing were therefore correct, and the Commissioner (Appeals) erred in confirming duty merely because the goods were seized by a State authority.

Conclusion: Seizure of the goods by the State Forest Department did not constitute removal under Rule 9(1), and the demand was unsustainable. The appeal was rightly allowed in favour of the assessee.

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