Tribunal decision on confiscated goods: raw materials and packing set aside, finished goods upheld

The Tribunal set aside the confiscation of raw material and packing material, valued at Rs. 21,65,598/- and Rs. 84,090/- respectively, as the appellant had not availed Cenvat credit on these materials. However, the confiscation of finished goods worth Rs. 8,02,434/- was upheld due to evidence of clandestine removal. The redemption fine was reduced to Rs. 80,000/- from an initial Rs. 3,25,000/- imposed on the confiscated goods. The Commissioner (Appeals) order was mostly upheld, with the appeal disposed of accordingly.

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Issues Involved:
1. Confiscation of raw material and packing material.
2. Confiscation of finished goods.
3. Imposition of redemption fine.

Detailed Analysis:

1. Confiscation of Raw Material and Packing Material:
The appellant contested the confiscation of raw material and packing material valued at Rs. 21,65,598/- and Rs. 84,090/- respectively, arguing that they had not taken any Cenvat credit on these materials. The contention was that Rule 25 of the Central Excise Rules, under which these goods were confiscated, applies only to finished goods. The appellant relied on the judgment of the Punjab & Haryana High Court in the case of *Annapurna Impex Pvt. Ltd.*, which stated that there is no provision for the confiscation of raw material and packing material if no Cenvat credit has been availed. The Tribunal agreed with this argument, noting that the Department could not show any provision allowing for such confiscation. Consequently, the confiscation of raw material and packing material was set aside.

2. Confiscation of Finished Goods:
The appellant also contested the confiscation of finished goods valued at Rs. 8,02,434/-. The investigation revealed that the appellant had crossed the SSI exemption limit and was engaged in systematic clandestine removal of goods using "kachcha parchis" (loose slips) for unaccounted clearances. The appellant did not register with the Central Excise Department despite crossing the turnover limit of Rs. 150 lakh and failed to produce any documentary evidence to show that the goods were accounted for in their books. The Tribunal found that the appellant intended to remove the finished goods clandestinely, as evidenced by the statements of Shri Rajeev Juneja and Shri Gulshan Kumar. Therefore, the confiscation of finished goods was upheld, but the redemption fine was reduced to Rs. 80,000/-.

3. Imposition of Redemption Fine:
The appellant challenged the imposition of a redemption fine of Rs. 3,25,000/- on the confiscated goods. The Tribunal modified the order, reducing the redemption fine to Rs. 80,000/- for the finished goods while setting aside the confiscation of raw material and packing material.

Conclusion:
The Tribunal's order modified the decision of the Commissioner (Appeals) as follows:
- Confiscation of raw material and packing material was set aside.
- Confiscation of finished goods was upheld.
- Redemption fine was reduced to Rs. 80,000/-.

The remaining parts of the Commissioner (Appeals) order were upheld as they were not contested by the appellants. The appeal was disposed of accordingly.

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