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Nirmal Products (Unit-I) and Others V/S CCE, Udaipur

    Appeal Nos. E/2375-2377/2011-SM (Arising out of Order-in-Appeal Nos. 45-47(CB) CE/JPR-II/2010 dated 18.3.2011 passed by the Commissioner (Appeals), Jaipur-II) and Final Order Nos. 58074-58076/2017

    Decided On, 15 November 2017

    At, Customs Excise Service Tax Appellate Tribunal New Delhi

    By, THE HONORABLE JUSTICE: S.K. MOHANTY
    By, MEMBER

    For Petitioner: Kumar Vikram, Advocate And For Respondents: Kanu Verma Kumar, D.R.



Judgment Text


1. These appeals are directed against the impugned order dated 18.3.2011 passed by the Commissioner, Central Excise (Appeals), Jaipur.

2. The brief facts of the case are that the appellants M/s. Nirmal products (Unit No. I and Unit II) are engaged in the manufacture of lime mix chewing tobacco and pouches falling under Chapter 24 of the Central Excise Tariff Act, 1985. The Central Excise officers visited the factory premises of the appellants on 8.3.2008 and found "Panna" brand lime mix chewing tobacco were produced in the Farm House with the aid of 6 numbers of pouches packing machine, 2 number of sealing machine, one HDPE bag stitching machine and one DG set, which were found installed in the said Farm House. Since, no statutory records were maintained in respect of availability of the said goods in the factory premises, the Central Excise department seized such goods under the reasonable belief that the same are liable for confiscation under Rule 25 of Central Excise Rules, 2002 under Panchnama. Subsequently, the department issued Show Cause Notice, seeking recovery of the duty demand and for imposition of penalties on the appellants. The matter was adjudicated against the appellants vide order dated 20.5.2010, wherein the duty demands confirmed along with interest and penalties were imposed on the appellants. On appeal, the ld. Commissioner (Appeals) vide the impugned order has upheld the adjudged demand.

3. The ld. Advocate appearing for the appellant submits that the appellants - M/s. Nirmal Products (Unit No. I & II) are not contesting the duty liability along with interest confirmed against them in the adjudication order. However, the appellant is contesting the confiscation of seized goods as per the seizure memo dated 8.3.2008 on the ground that the seizure memo consists of the finished product, raw material and machines installed in the factory of the appellant. The ld. Advocate submits that under Rule 25 ibid only finished product can be confiscated and confiscation of raw material and other goods are outside the scope and purview of confiscation under Rule 25 ibid. To support such stand, the ld. Advocate has relied on the decision in the case of Anchal Prints Pvt. Ltd. Vs. CCE 2009 (235) ELT 117 (Tri.-Ahmd.). The appellant, Shri Bhavesh Chaplot, authorized signatory of M/s. Nirmal Product is also contesting the penalty imposed on him under Rule 26 ibid on the ground that ingredients mentioned in Rule 26 ibid are absent and the appellant has no role in contravention or violation of the statutory provisions.

4. On the other hand, the ld. DR appearing for the Revenue reiterates the findings recorded in the impugned order.

5. Heard both sides and perused the case records.

6. On perusal of the case records, I find that the RG-1 register was not properly maintained by the appellant and accordingly, the finished goods, raw material etc. available in the factory were seized and confiscated by the department under Rule 25 of the Central Excise Rules 2002. Since, Rule 25 ibid has been invoked for confiscation of the seized goods and for imposition of penalty on the appellant, it is to be ascertained, whether the said statutory provisions are applicable under the facts and circumstances of the case for confiscation of the said seized goods. On perusal of Rule 25 ibid, it reveals that raw material is neither covered in clause (a), (b) and (c) of sub-rule (1) of Rule 25 and also not appearing in clause (d) of the said sub-rule. Since Rule 25 only deals with the excisable goods manufactured by the person and admittedly other than chewing tobacco, the appellants are not manufacturing any other products in their factory, I am of the view that excepting chewing tobacco i.e. finished product of the appellant, other goods cannot be confiscated under Rule 25 ibid. I find that in identical situation, this Tribunal in the case of Anchal Prints Pvt. Ltd. (supra) has held that raw material or semi finished processed goods cannot be confiscated under Rule 25 ibid and accordingly, redemption fine imposed was set aside. Thus, out of 8 items seized and confiscated by the department, only the finished product viz. chewing tobacco of "Panna" brand valued at Rs. 3,94,400/- is liable for confiscation and redemption fine can be imposed for redeeming the said goods only. Since, the option was given to the appellant to redeem all the seized goods on payment of redemption fine of Rs. 2,50,000/-, I am of the view that under the circumstances of the case, redemption fine can be reduced to Rs. One lakh. Accordingly, the impugned order is modified to the extent of reducing the redemption fine to Rs. One lakh on the finished goods seized by the department. I also find that pe

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rsonal penalty imposed on Shri Bhavesh Chaplot, the authorized signatory of M/s. Nirmal Products cannot be imposed under Rule 26 ibid on the ground that the goods were not removed outside the factory premises in clandestine manner and also for non maintenance of proper records, the main appellants have already been penalized under Rule 25 ibid. Therefore, penalty imposed on Shri Bhavesh Chaplot is set aside and the appeal is allowed in its favour. 7. The appeals filed by the appellants are disposed of in above terms.
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