Farmparts Company vs Cce & St, Ludhiana

[Arising out of the Order-in-Appeal No.LUD-EXCUS-000-APP-431-113-14 dt.23.7.13 passed by the CCE (Appeals), Chandigarh)

Date of Hearing/Decision: 05.2.2015

For Approval & signature:

Honble Mr.Ashok Jindal, Member (Judicial)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes

Farmparts Company Appellant

Vs.

CCE & ST, Ludhiana Respondent

Appearance

Shri Om Prakash, Advocate- for the appellant

Shri R.K.Mishra, A.R. - for the respondent

CORAM: Honble Mr.Ashok Jindal, Member (Judicial)

FINAL ORDER NO.50343/2015

Per Ashok Jindal :

The appellant is in appeal against the impugned order.

2. The brief facts of the case are that the appellant is engaged in the manufacture of Tractor Parts, Forging etc. Acting upon information, the Preventative Staff of the Central Excise visited the factory premises of the appellant on 30.11.2009. The concerned Range Staff was already there supervising the stuffing of export consignment in the container. The Preventive Staff did physical verification of the stock who found that the goods were 52 pallets and 85 cardboard cartons (duly packed containing Tractor parts and forgings etc.) valued at Rs.40,39,532/- involving Central Excise duty of Rs.3,32,857/- were found lying unaccounted in the factory premises of the appellant against the recorded balance in their statutory record i.e. RG-1 register. It was noticed that there were pre-dated OK stickers pasted on the pallets/boxes with the dates prior to the date of visit of staff and also bearing the details like part number of the goods contained therein. The goods were found in fully finished and in packed condition. The goods were seized and a case was booked against the appellant for confiscation of seized goods. The show cause notice issued and adjudication took place and it was held that the goods were liable for confiscation and the same can be redeemed on payment of redemption fine of Rs.5 lakh and for imposition of penalty of equivalent amount. Aggrieved with the said order, the appellant filed the appeal before the Commissioner (Appeals) who upheld the adjudication order. Therefore the appellant is before me.

3. Ld.Counsel for the appellant submits that although the goods were lying unaccounted in the factory premises but merely on non accountal of the goods in the statutory records, the goods cannot be confiscated without malafide intent to clear the goods. Therefore, he submits that the goods were not liable for confiscation and consequently redemption fine and penalty be dropped.

4. On the other hand, learned AR for the Revenue submits that the goods were in packed condition and were about to be removed clandestinely without payment of duty. Therefore, the goods were liable for confiscation, imposition of redemption fine and penalty.

5. Heard the parties and considered the submissions.

6. In this case, after going through the show cause notice, I find that on physical verification of the goods, they were contained 52 pallets and 85 cardboard cartons (duly packed containing Tractor parts and forgings etc.) which were lying unaccounted in the factory premises of the appellant and were in fully finished condition. The contention of the appellant that merely non accountal of the goods in the statutory records does not lead for confiscation of the goods, unless there is malafide intention on the part of the appellant is proved. In this case, if the preventive staff did not visit the factory premises of the appellant, these fully finished goods would have been cleared by the appellant clandestinely. Therefore, this clearly shows that these seized goods are ready to clear clandestinely without payment of duty. In these circumstances, I hold that the goods are liable for confiscation and consequently redemption fine and penalty are imposable. Further, I find that the goods were meant for export. In that situation, redemption fine and penalty are excessive and are harsh. Therefore, the redemption fine is reduced to Rs.1 lakh and penalty is reduced to Rs.50,000/-.

7. With these terms, the appeal is disposed of.

(dictated & pronounced in the open court)

(Ashok Jindal)

Member (Judicial)

mk

1