Confiscation order overturned due to lack of evidence for clandestine removal. Penalties deemed unjustified.

The case involved the confiscation of excess finished goods without payment of Central Excise duty by the appellant company. The Department seized the goods alleging clandestine clearance. The Tribunal found lack of evidence for clandestine removal and improper stock taking methods, leading to the confiscation order being set aside. Additionally, the imposition of redemption fine and penalties on the company and directors was deemed unjustified due to insufficient proof of intent for clandestine removal. The penalties were overturned, and the appeals were allowed in favor of the appellants.

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Issues involved:
- Confiscation of excess finished goods without payment of duty
- Imposition of redemption fine and penalties on the company and directors

Confiscation of excess finished goods without payment of duty:
The case involved the clandestine clearance of excisable finished goods without payment of Central Excise duty by the appellant company. The Department seized excess quantities of M.S.Bars/TMT Bars and M.S.Flats from the factory premises, alleging that these goods were intended to be removed without duty payment. The Department prepared a Panchanama and recorded statements from the Directors of the company. The impugned order confiscated the seized goods with an option for redemption on payment of a fine. The appellant argued that the stock taking was done on an estimation basis without physical verification, and the differences in stock were minimal. The appellant contended that since the goods were physically present in the factory and not removed, the allegation of clandestine removal was unfounded. The Tribunal found that the Department lacked evidence regarding the method of stock taking and solely relied on retracted statements for the confiscation. It was held that without proof of intention for clandestine removal and proper weighment, the goods could not be confiscated.

Imposition of redemption fine and penalties on the company and directors:
The impugned order imposed a redemption fine and penalties on the appellant company and its directors. The company argued that the penalties were unjustified as there was no proof of clandestine removal. The Tribunal noted that the Department failed to provide tangible evidence of intent for clandestine removal and proper stock taking procedures. The Tribunal referenced past decisions where penalties were set aside due to lack of proof of clandestine removal. The Tribunal distinguished a previous case cited by the Revenue where a statement was not retracted, unlike in the current case. As the retracted statement was not addressed in the impugned order, the Tribunal found no justification for the penalties. Consequently, the impugned order was set aside, and the appeals were allowed in favor of the appellants.

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