TaxTMI 
TaxTMI 
2016 (1) TMI 1261
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.... Steel Pvt. Ltd. (the appellant No.1) is engaged in the manufacture of spring assembly and leafs (springs leafs) falling under Tariff Heading 7320 of the First Schedule to Central Excise Tariff Act, 1985. M/s. Taneja Brothers (the appellant No.2) is engaged in the trading of goods manufactured by the appellant No.1. The Officers of Central Excise Headquarters Preventive Branch, Indore visited the shop of the appellant No.2 on 09.03.2010 and during the course of verification, they came to know that the leaf springs valued at Rs. 25,44,508/- were lying in the shop of the appellant No.2. On the basis of investigation, show cause notices were issued to both the appellant No.1 and 2, proposing confiscation of goods under Rule 25 of the Central E....
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....Trading company and Others reported in 2013 (290) E.L.T. 200 (Del.). The ld. Advocate further submits that both the authorities below have not discussed as to which of the clause enumerated in Rule 25 has the application in the case for confiscation of goods and for imposition of penalty. In this context, the ld. Advocate has placed reliance on the judgment of Hon'ble Supreme Court in the case of Amrit Foods vs. Commissioner of Central Excise, U.P. reported in 2005 (190) E.L.T. 433 (SC.). It is the submission of the ld. Advocate that once the goods are not liable for confiscation, the penalty imposed under Rule 26 of the Rules on the appellant No.2 is not legal and proper. To substantiate her said submission, the ld. Advocate has relied on ....
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....26, when the confiscation is not proper and justified. Rule 25 & 26 of the Central Excise Rules 2002 is extracted herein below:- "RULE 25. Confiscation and penalty. - (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse [or an importer who issues an invoice on which CENVAT credit can be taken] or a registered dealer,- (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certif....
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....hich the user of said invoice or document is likely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of CENVAT credit under the CENVAT Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater.]" 7. On perusal of Rule 25 ibid, it reveals that the provisions contained therein can be invoked against the persons namely, producer, manufacturer, registered person of warehouse, registered dealer. In the present case, the appellant No.2 is not confirming to any of the category of persons mentioned in the said rule. Thus, in my view, the provisions of Rule 25 cannot be invoked against appellant No.2 for confis....
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....arehouse in which the said zarda had been stored. The respondents are also not the registered dealers. That being the case, no penalty can be imposed on the said respondents. The Tribunal has come to the correct conclusion, particularly, as it was not the case of the prosecution that the respondents fell within any one of the four categories of persons mentioned above." 9. Since the show cause notices in this case have not been properly issued to the persons to whom the same were required to be issued, imposition of penalty under Rule 25 and Rule 26 is not justified in the circumstances of the present case. In this context, I rely on the judgment of the Hon'ble Supreme Court in the case of Amrit Foods(supra), the relevant paragraph of the ....