2014 (11) TMI 150 - AT - Customs

Tribunal Upholds Order on Central Excise Duty & Customs - No Basis for Confiscation

COMMISSIONER OF C. EX. & ST., SURAT-II Versus KAY BEE TAX SPIN LTD.

The Tribunal upheld the Order-in-Original confirming demands of Central Excise Duty, Customs Duty, interest, and penalties on raw materials in an appeal ... Confiscation of goods - Redemption fine - Revenue is in appeal only for reason that the Adjudicating Authority has not ordered for confiscation of the raw materials despite there being a bond executed by the assessee. - Held that:- the main plank of the Revenue’s appeal is that the commissioner has erred in refraining from formally confiscating and imposing redemption fine on of goods. In our view, the revenue appeal is on diversion of imports and inasmuch as when the goods are not there for confiscation, the question of confiscation cannot arise - Respondents’ assessee is liable to pay Central Excise Duty on the goods manufactured out of the raw materials imported on which the revenue has foregone the Customs duty - Decided against the Revenue. Issues:Appeal against confirmation of demands of Central Excise Duty, Customs Duty, interest, and penalties - Non-appearance of respondent - Alleged diversion of goods by 100% EOU - Non-contestation of the order by respondent - Revenue's appeal on non-confiscation of raw materials - Interpretation of relevant legal provisions - Application of Supreme Court judgment - Upholding of impugned order.Analysis:The judgment pertains to an appeal filed by the Revenue against an Order-in-Original (O-I-O) confirming demands of Central Excise Duty, Customs Duty, interest, and penalties on raw materials. The Tribunal noted that despite hearing notices being returned as 'Not Known' by the Post Office, the appellant was served the notices through pasting after drawing the Panchnama. As the respondent did not appear, the matter was taken up for disposal. The Adjudicating Authority had found the appellant, a 100% Export Oriented Unit (EOU), diverted goods illicitly into the open market, leading to the confirmation of dues. The key contention in the Revenue's appeal was the non-confiscation of raw materials despite a bond executed by the assessee. The Tribunal observed that the appeal focused on diversion of imports, and as goods for confiscation were not present, confiscation could not be ordered, contrary to the Revenue's argument based on a Supreme Court judgment. The Adjudicating Authority had already held the respondent liable for Central Excise Duty on goods manufactured from imported raw materials, where Customs duty was foregone by the Revenue.The Tribunal, after considering the facts and circumstances, upheld the impugned order, particularly emphasizing the non-confiscation of raw materials. The decision was based on the interpretation of relevant legal provisions and the specific details of the case at hand. The Tribunal's analysis highlighted the distinction between the Revenue's appeal grounds and the actual situation regarding the diversion of goods and the liability for Central Excise Duty. By rejecting the appeal, the Tribunal affirmed the Adjudicating Authority's findings and decision, concluding the legal proceedings in this matter. The judgment provides a detailed examination of the issues raised, the legal arguments presented, and the application of relevant laws and precedents to arrive at a final decision.