2017 (12) TMI 1084 - AT - Central Excise

Confiscation of Duty-Paid Goods: Manager's Penalty Overturned, Revenue's Appeal Dismissed

The case involved the confiscation of sugar stored in a non-duty paid godown without recording receipt in statutory records. The Commissioner (Appeals) ... Excisable goods - duty paid goods - non-excisable goods upon payment of duty - absence of jurisdiction of adjudicating authority over non-excisable goods - confiscation under Rule 25 of the Central Excise Rules, 2002Duty paid goods - non-excisable goods upon payment of duty - absence of jurisdiction of adjudicating authority over non-excisable goods - Whether the goods seized were excisable and whether the adjudicating authority had jurisdiction to order confiscation and penalties. - HELD THAT: - The Tribunal found on the record that the sugar in question was manufactured by third-party manufacturers in Maharashtra, Karnataka and Uttar Pradesh and that central excise duty had been discharged. Once duty is paid, the goods cease to be excisable goods and are not within the jurisdiction of the adjudicating authority to adjudicate as excisable goods. The Tribunal agreed with the Commissioner (Appeals) that the adjudicating authority therefore lacked jurisdiction to order confiscation, redemption fine and penalties under the excise rules in respect of those goods. Having reached that legal conclusion, the Tribunal found no infirmity in the appellate order which set aside confiscation, demand and penalties. [Paras 6]Findings that the goods were duty paid and hence non-excisable; adjudicating authority lacked jurisdiction; impugned order of Commissioner (Appeals) upheld and Revenue's appeal dismissed.Final Conclusion: The appeal by Revenue is dismissed; the Order in Appeal dated 29.10.2010 is upheld as the goods were duty paid and not excisable, the adjudicating authority lacked jurisdiction, and the respondent is entitled to consequential relief as per law. Issues involved:1. Confiscation of sugar stored in non-duty paid godown without recording receipt in statutory record.2. Adjudication of confiscation, penalty, and redemption fine.3. Appeal against Order-in-Appeal No. 361-362-CE/MRT-II/2010 dated 29.10.2010.4. Jurisdiction of Adjudicating Authority over duty paid goods not manufactured by respondent.Analysis:1. Confiscation of sugar stored in non-duty paid godown:The case involved the respondent procuring sugar from various manufacturers and storing it in a godown outside their manufacturing premises without recording its receipt in any statutory record. The Central Excise Department seized the sugar due to suspicions of replenishing and stock storage. The original authority confiscated the sugar and imposed penalties. The Commissioner (Appeals) held that since the goods were duty paid and not disputed by Revenue, confiscation was unwarranted. The respondent's submission of evidence and compliance with payment methods were considered.2. Adjudication of confiscation, penalty, and redemption fine:The original authority confiscated the sugar and imposed penalties on the respondent and a personal penalty on the manager. The Commissioner (Appeals) overturned this decision, stating that the confiscation, demand of duty, and penalties were not sustainable. The Commissioner found that the goods were duty paid, not entered in records, and the penalty on the manager was unwarranted. The Revenue appealed these decisions, citing various grounds including unaccounted storage, clandestine removal, and contravention of rules.3. Appeal against Order-in-Appeal No. 361-362-CE/MRT-II/2010:The Revenue filed an appeal against the Order-in-Appeal dated 29.10.2010, challenging the Commissioner's findings regarding the duty paid nature of the goods, confiscation, and penalties. The Revenue argued that the Commissioner erred in not considering the illegal and unaccounted storage of goods and the replenishment of clandestinely removed goods. Various provisions of the Central Excise Rules were cited to support the appeal.4. Jurisdiction of Adjudicating Authority over duty paid goods:The Adjudicating Authority did not have jurisdiction over the duty paid goods stored by the respondent, as they were not manufactured by the respondent and the duty of Central Excise was already discharged. The Tribunal upheld the Commissioner's decision, stating that since the goods were duty paid and not within the Adjudicating Authority's jurisdiction, the order was sustainable. The appeal filed by Revenue was dismissed, and the respondent was entitled to consequential relief as per law.