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2016 (4) TMI 1071 - HC - Central ExciseImposition of penalty - Violation of Rule 209A of the Central Excise Rules, 1944 - Import of scrap into India and sold it locally - Held that:- the appellant was an importer and cleared the goods after payment of duty of excise. Rule 209A imposes three requirements to be satisfied before a penalty could be imposed. Those requirements are (1) that the person concerned should have acquired possession of or in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner dealing with the goods; (2) that such goods must be excisable goods and (3) that he must have knowledge or reason to believe that those goods are liable to be confiscated under the Central Excise Act or the rules. Let us assume that first requirement is satisfied but the goods were not excisable goods. The appellant is only an importer. Even according to the show cause notice or the orders of the authorities, the appellant is not engaged in any manufacturing activity. The goods did not become excisable goods at the hands of the appellant. It is only at the hands of the Company Chamak Holdings Limited, that the goods became excisable goods due to the manufacturing activity undertaken by that company. Therefore, the second requirement is not satisfied. The third requirement is also not satisfied since the goods were not liable for confiscation at the hands of the appellant. The appellant is not alleged to have defaulted in payment of customs duty or evaded the payment of excise duty or alleged to have cleared the goods out of the port clandestinely. Therefore, so long as the goods remained with him, they are not liable for confiscation. They would have become liable for confiscation after the purchaser manufactured the finished goods and sold them without invoices, thereby escaping payment of duty of excise. Therefore, the third limb of the rule is also not satisfied. Hence, the order of the authorities are unsustainable. - Decided in favour of appellant
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