TMI Blog2022 (9) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... nising their manufacture, procurement of raw material and clearance of finished /semi finished goods from their premises with the help /abatement of their Director and employees with an intent to evade central excise duty. The department presumed that appellant deliberately did not maintain proper accounts of raw material to prove their actual production and for facilitating the clandestine removal - The goods which have been ordered for confiscation were admittedly lying within the premises of appellants and those include raw material as well. It has been the main ground of the contention of the appellants that Rule 25 is only about confiscating excisable goods and not the raw material. Bare perusal makes it clear that the Rule pertains to excisable goods i.e. goods which are manufactured by the assessee. Since the raw material of assessee cannot be held to be goods manufactured by assessee, same is definitely beyond the scope of confiscation under Rule 25 of Excise Rules. Merely because raw material of an assessee is marketable as such, same can not be held to be the excisable goods. As per Section 2(d) of Central Excise Act, 1944, goods which are subjected to duty of excise a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No Location Order-in- Original No. date Order in Appeal No. Date Show Cause Notice No. date Goods/item Involved Value of Goods Redemption fine penalty E/50339/18 Unit I II wazirpur industrial area OIO No. 08/2016 Dt 18.10.2016 OIA No. 227- 229/2017 dt. 26.9. 2017 1024/11 dt 26.4.12 Finished goods Semifinished goods Raw Material Rs15948870/- Rs.13921226/ Rs.99,15,934/ Rs.4,50,000/- RF Nil Nil E/50338/18 Ailpur Bawana Job worker godown OIO No. 001- 04/2016-17 Dt 31. 08.2016 OIA No. 227- 229/2017 dt. 26.9. 2017 1025/11 dt 26.4.12 Finished goods Semifinished goods Raw Material Rs 1,90,000/- Rs.80,40,72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn keeper. The goods from these premises were seized under panchnamas of even dates. Even laptop and CPU of the appellants were also resumed vide the said Panchnama on the reasonable belief of being unaccounted and being liable for confiscation. Accordingly, said goods were seized and panchnama of even dates were drawn. However, those were being handed over to Shri Sanjay Jain under superdginama. 3. The goods were provisionally released on furnishing of required B 11 Bond along with bank guarantee of Rs.22,92,617/- (10% of the Bond value) dated 23.2.2011 issued by ICICI Bank Sector 8, Rohini and on execution of surety bonds. The seized goods (raw material, semi finished goods and finished goods) were proposed to be confiscated vide the respective show cause notices with the respective penalties as mentioned in the table above. The proposal was confirmed vide the aforementioned separate Orders-in-Original to the extent as mentioned in the table above. The appeal against those orders has been rejected vide the common Order-in-Appeal No. 227- 229/2017 dated 26.0-9.2017. Being aggrieved the appellants are before this Tribunal. 4. I have heard Shri Jatin Mahajan, learned Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was found that appellants have transferred the large amount of raw material used in the manufacture of diaries to its other units situated in the city for different processes without documentation. No records of such transfers were maintained. Learned Departmental Representative has impressed upon that from the plain reading of the definition of excisable goods under section 2(d) of Central Excise Act, 1944, it becomes clear that if raw material are such goods which are marketable those too as such, are excisable goods. Hence there is no infirmity in the order under challenge while ordering confiscation even of raw material. Due to lack of evidence on behalf of the appellant, confiscation of finished goods as well as semi finished goods is also justified. Three of the appeals are therefore, prayed to be dismissed. 7. Having heard rival contentions of the parties and perusing the record of all the appeals, I observe and hold as follows: The appellant admittedly is engaged in manufacture of diaries, calendars etc. All his final products are being manufactured at the same premises with common electricity, labour etc. Even the registrant for two different excise registrations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or (rupees two thousand), whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice . 8. Bare perusal makes it clear that the Rule pertains to excisable goods i.e. goods which are manufactured by the assessee. Since the raw material of assessee cannot be held to be goods manufactured by assessee, same is definitely beyond the scope of confiscation under Rule 25 of Excise Rules,. Merely because raw material of an assessee is marketable as such, same can not be held to be the excisable goods. As per Section 2(d) of Central Excise Act, 1944, goods which are subjected to duty of excise are excisable. Hence, these are the goods manufactured for clearance from place of manufacture which are excisable and are thus covered under Rule 25 of Excise Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s [2006 (194) ELT 237 (Tri-Del)]. 10. Otherwise also, it has been a settled law that shortage by itself cannot be held to be a sufficient evidence so as to lead to inevitable conclusion that assessee is involved in unaccounted procurement of raw material and manufacture of excisable goods with the sole intent to clear the same without payment of Central Excise duty leviable thereupon. I draw my support from the decision of Hon ble High Court of Gujarat in the case of Commr. of Central Excise, Service Tax, vs Daman Nissan Thermoware P. Ltd. reported as [2011 (266) E.L.T. 45 (Guj.)]. The Hon ble High Court has even observed that shortages of one of raw material and even the admission by the Direction cannot be held to be a sufficient evidence so as to indicate the clearance of goods without payment of Excise duty. The allegation of clandestine removal are the serious allegations, cannot be leveled unless there is a clinching evidence produced by the Department that too from the various corners to prove the same. The kind of evidence as is required to prove such allegations has been elaborated in the case of Continental Cement Company vs Union of India reported in [2014 (309) EL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y rebutt the presumption of goods to be duty paid. I am otherwise of the opinion that the persons intending to clandestinely remove the goods without payment of duty would usually remove the same at the earliest instead of awaiting the risk of detection of getting caught, keeping the goods in a factory unaccounted for a longer period. In such situation, the absence of any proof about the intention of the assessee to clear those goods without payment of duty is sufficient to hold that the order of confiscation of the finished, semi-finished goods, passed by Commissioner (Appeals) is nothing but is passed merely on the presumptions and assumptions of Revenue. 12. It is rather observed from the record that appellant while giving its written submissions had duly clarified about the reason to have two registrations for the same premises. The calendars were not subjected to duty prior to budget of 2011 and subsequent thereto they were eligible for concessional duty @ 1% subject to the condition that Cenvat credit facility is not availed. Pursuant to Notification No. 1/2011 dated 1.3.2011, it was specifically mentioned that the calendars were cleared after discharging the appropriate d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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