M/S. 6 Number Scented Tobacco Company vs Cce, Salem

(Arising out of Order-in-Appeal No. 60/2013-C.Ex. dated 22.8.2013 passed by the Commissioner of Central Excise (Appeals), Salem)

M/s. 6 Number Scented Tobacco Company Appellant

Vs.

CCE, Salem Respondent

Appearance

None for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent

CORAM

Honble Shri D.N. Panda, Judicial Member

Date of Hearing / Decision: 05.03.2015

Final Order No. 40195 / 2015

None present for appellant. There is an application to decide both stay application and appeal on merit.

2. Heard Revenue.

3. Record reveals that there was detection of excess stock of branded chewing tobacco. At the time of investigation by the investigating authority that remained undisputed. Learned adjudicating authority has recorded the reason why such excess stock was confiscable. The appellant explained that the goods were entered in RG-I Register maintained upto 5.9.2011 but that could not be updated in view of absence of the concerned partner and a staff.

4. In the grounds of appeal in para 5 appellant has stated that its accounts were written upto 31.8.2011 and not updated from 1.9.2011 to 5.9.2011 while date of visit by the investigating authority were 6.9.2011.

5. Appellants further plea was that the officer who seized the goods should not have acted as adjudicating authority. This does not appeal to common sense as to why his power is challenged in absence of any specific prohibition in law. The investigating authority may be adjudicating authority. He is not precluded to act as such and not prohibited to exercising the power of adjudication. Therefore, appellants plea on such count is dismissed.

6. When the accounts were not updated and excess quantity of goods were found during inventory, preponderance of probability was in favour of Revenue to hold possible circumstance of clandestine removal. In absence of any reconciliation statement of the excess goods found, it was not open to the appellant to challenge that mere absence of the partner or the staff shall not bring the appellant to the ambit of adjudication. Therefore, excess branded chewing tobacco found by investigation can be inferred to be unaccounted stock with the object of removal thereof without payment of duty. Appellants only plea all along was that mere unaccountal of the stock found does not make the appellant liable to duty or penal consequence. Adjudicating authority had every reason to believe that the appellants goods were liable to confiscation and redeemable on payment of redemption fine. Therefore, both seizure and imposition of redemption fine is confirmed.

7. So far as quantum of redemption fine is concerned, appellant says that because the Bangalore Bench of Tribunal has ordered 10% of the value of the goods to be redemption fine that provides basis. It may be stated that redemption fine cannot to mechanically imposed by a formula to each case. Honble Supreme Court held that there cannot be a straight jacket formula to impose redemption fine. Such fine normally bases on the profit expected from dealing in confiscable goods. Honble Court in the case of Commissioner of Customs, Mumbai Vs. Mansi Impex  2011 (270) ELT 631 (SC) has held that no arbitrary or whimsical order shall be passed by Tribunal without recording any reason to reduce redemption fine mechanically against the imposition by the adjudicating authorities. In the case of Commissioner Vs. Stoneman Marble Industries  2011 (264) ELT 3 (SC) it has been held that standard formula cannot be laid down for imposition of redemption fine and penalty, which is imposed considering the facts and circumstances of the case and the fitness of the fact situation. Therefore, no formula of 10% can be applied in the present case. Therefore, the amount of redemption fine imposed by learned Adjudicating Authority is confirmed.

8. Honble High Court of Delhi in the case of Commissioner of Customs & Central Excise, Delhi  IV Vs. Achiever International  2012 (286) ELT 180 (Del.) has held that discretion is no doubt vested with the authority to release the goods on payment of redemption fine. But such discretion must be exercised in a just and fair manner on the basis of facts and has to be exercised after recording cogent and relevant reasons. There should not be failure of justice or grave injustice. Statutory discretion is not usually absolute. It is qualified by express or implied legal duty to comply with the substantive and procedural requirement before the decision is taken following the ratio laid down in National Insurance Co. Ltd. Vs. Keshav Bahadur (2004) 2 SCC 370. The present case being the case of tobacco product which has higher margin in the market, there shall be no interference to the adjudicated fine since the appellant did not come out to show the extent of margin earned in dealing with Tobacco products. Therefore, there is no necessity to intervene to the decision of learned adjudicating authority.

9. The next question comes is penalty. When there was prejudice caused to Revenue, there cannot be exoneration from penalty which otherwise shall be sanction to illegality. Therefore, there shall be no interference to the penalty imposed also. Accordingly, the appeal as well as the stay application are dismissed (Dictated and pronounced in open court)

(D.N. Panda) Judicial Member

Rex

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