Full Judgment
Heard both sides. The respondents manufactured excisable goods and cleared the same without accounting for the same and without paying the duty. The lower appellate authority has upheld the duty demand as well as the penalty imposed on the respondents. However, he has set aside the confiscation of the goods found in excess within the factory premises and also part of the clandestinely cleared goods seized from the premises of M/s.R.K. Extrusions, leading to this appeal by the department.
2. Shri V.V. Hariharan, Ld. JCDR, appearing for the department states that the lower appellate authority has erred in not confiscating the impugned goods. As regards the excess goods found unaccounted within the factory premises, the same is required to be confiscated in the light of the decision of the Hon’ble Bombay High Court in the case of Kirloskar Brothers Ltd. Vs. UOI and Others - 1988 (34) ELT 30 (Bom.). As regards the goods seized from M/s. R.K. Extrusions, he states that though no separate notice has been issued to M/s. R.K. Extrusions, a copy of the notice has been issued to Shri V. Balaraman, who apart from being a partner of the respondent firm is also a attorney holder for his wife who is a partner in M/s. R.K. Extrusions. Apart from that, Shri V. Balaraman has only taken custody of the goods after the seizure was effected, as the power of attorney holder on behalf of M/s. R.K. Extrusions. According to Ld. JCDR, issue of notice to Shri V. Balaraman is sufficient notice to M/s. R.K. Extrusions from whose premises the clandestinely not duty paid goods were seized.
3. Heard Shri Durairaj, Ld. Consultant, appearing for the respondents. He states that there is requirement under the law to issue notice to M/s. R.K. Extrusions, from whose possession the impugned goods were seized. He cites the decision of the Hon’ble Bombay High Court in the case of Gawar Construction Ltd. Vs. UOI - 2009-TIOL-541-HC-MUM-CUS, which holds that the person from whose possession the goods have been seized should also be given a notice for confiscating the same. As regards the excess goods found within the factory premises, the Ld. Consultant prays for a lenient view.
4. After considering the submissions made by both sides, and the cited case law, I find that it is a clear case where the respondents have been manufacturing excisable goods, not accounting for the same and have also clandestinely cleared the same without payment of duty. The impugned excess goods found within the factory are clearly liable for confiscation in terms of the Central Excise Rules, in view of the cited decision of the Hon’ble Bombay High Court in the case of Kirloskar Brothers Ltd. (supra). Hence, the impugned order passed by the lower appellate authority in this regard is set aside and the impugned excess goods found within the factory premises are confiscated with an option to redeem the same on payment of redemption fine of Rs. One lakh. As regards the impugned goods seized from the custody of M/s.R.K. Extrusions, in the light of the decision of the Hon’ble Bombay High Court in the case of Gawar Construction Ltd. (supra), the arguments advanced on behalf of the department by the Ld. JCDR cannot be accepted. The department clearly faulted in not issuing a separate Show Cause Notice to M/s. R.K. Extrusions. As such, the decision of the lower appellate authority in setting aside the confiscation in respect of the impugned goods seized from the custody of M/s.R.K. Extrusions is upheld. The department’s appeal No. E/128/2008 is partly allowed in the above terms. As regards the appeal No. E/129/2008, filed against Shri V. Balaraman, the same is dismissed as the department’s appeal is only against the order of setting aside the confiscation of the goods and not against the order passed in respect of Shri V. Balaraman.