2007 (8) TMI 517

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.... seized by the department in the month of March and April 1988. Duty demand was raised in five show cause notices which were the subject matter of adjudication by the Deputy Commissioner vide his order dated 27-5-2002 by which a duty demand of Rs. 3,29,051.88 was confirmed, as a result of holding that the goods were cleared at a point of time when they fell for classification under Chapter 59 (prior to 1-3-1989, the goods fell for classification under Chapter Heading 52.06 and post 1-3-1989, by virtue of an amendment to Note 2 to Chapter 59 of the schedule to CETA, 1985, they fell for classification under Chapter Heading 59.03). The Deputy Commissioner also ordered payment of interest and imposed a penalty of amount equal to duty upon the a....

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....d fall for classification under Chapter Heading 89.03. The Tribunal set aside the confiscation and penalty ordered by the lower authority. The confiscation was ordered by the Commissioner vide his order dated 31-3-2003. Penalty was imposed both by the Commissioner in the above mentioned order as well as reduced in the other order of the Commissioner (Appeals), to Rs. 2,50,000/-. 2. Against the Tribunal's order in respect of Appeal No. E/3100/03, the assessee moved the Hon'ble Bombay High Court by way of filing Writ Petition No. 2080 of 2007 and vide order dated 28-3-2007, the High Court directed as under :- "2. By this Petition, the Petitioner is challenging the order dated 18th September, 2006 whereby the CESTAT had declined to....

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....since the goods were seized, which prevented clearance of the same by the assessees, and the seizure has been set aside by the Tribunal's Order No. A/113-114/WZB/MUM/2006/C-III, dated 21-2-2005, the duty demand under Chapter Heading 59.03 cannot be sustained, in the light of the Apex Court's decision in Kuil Fireworks Industries v. CCE, 1997 (95) E.L.T. 3 (S.C.), holding that an assessee cannot be made to suffer on account of an illegal act of the departmental authorities. In other words, it is their contention that the detention/seizure of the goods having been ultimately found to be unsustainable, they cannot be now made to pay the duty in terms of classification under Chapter Heading 59.03 for the reason that if the goods had not been se....