2006 (8) TMI 506 - AT - Central Excise

Revenue appeal dismissed due to lack of evidence and proper accounting. Importance of concrete evidence in confiscation cases.

The appeal filed by the revenue challenging the confiscation of raw materials and penalty reduction was dismissed. The Commissioner (Appeals) set aside ... Confiscation of raw materials - Non-accountal in statutory records Issues:Appeal against confiscation of raw-materials and penalty reduction.Analysis:The appeal was filed by the revenue challenging the order-in-appeal that set aside the confiscation of raw-materials seized in the factory of the respondent and reduced the penalty imposed on the respondent. The Commissioner (Appeals) set aside the confiscation based on the grounds that the raw materials were not entered in the respective records and there was no allegation that the appellants had taken credit of duty paid on the inputs in question in their Modvat account. The Commissioner (Appeals) referred to previous decisions by CEGAT to support the decision, emphasizing that confiscation cannot be solely based on goods meant for clandestine removal without proper accounting. The Commissioner (Appeals) concluded that there was no justification for confiscation of raw material and imposition of redemption fine, as the goods seized were raw materials and not semi-processed/finished goods.The Commissioner (Appeals) correctly applied the settled law by the Tribunal in various cases and noted that the raw material was not Modvatable with no credit entries made. Therefore, there was no reason for interference in the impugned order of the Commissioner (Appeals). The appeal filed by the revenue was dismissed, affirming the decision of the Commissioner (Appeals) to set aside the confiscation of raw materials and reduce the penalty imposed on the respondent. The judgment highlighted the importance of proper accounting and the inability to confiscate goods solely based on suspicions of clandestine removal without concrete evidence.