2019 (2) TMI 847 – CESTAT CHENNAI – TMI – Quantum of redemption fine and penalty – removal of electric fans from factory to godown without payment of duty – contravention under Rule 25 Clause (c) and (d) of CER – Held that:- Removal from the factory to its godown is not an act of fraud, collusion, suppression etc. to evade payment of duty since, had it been sold to third parties, the same would have amounted to an act against the Government scheme. Even the Revenue has not made out any case that the goods so removed as above have been found to be diverted and thereafter to be sold elsewhere. Thus, the only infraction of removal of goods without prior permission, is only a procedural lapse, which cannot take the characteristic of clandestine removal with intent to evade duty especially, when the goods are otherwise non-marketable.
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The procedural breach would be best served by limiting the redemption fine to ₹ 50,000/- as well as penalty to ₹ 50,000/ appeal allowed in
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ending interalia that duty credit available with the assessee at the end of the month (August, 2015) was ₹ 1,23,39,512/- as against the duty demand of ₹ 13,83,970/-; that the appellant had taken on rent the godown premises for stocking of excisable goods manufactured at the company s registered factory due to space constraint; that the seized goods were not marketable otherwise since the same was manufactured for Tamilnadu Government to be distributed freely as per a scheme of the Government; that the removal of the above goods against the returnable delivery challans was undertaken to facilitate further production at its registered premises, that the contract was for bulk quantity but the supply was effected as per the terms of contract in retail form at each taluk office, etc., but accepted to clear the Central Excise Duty of ₹ 13,83,970/- demanded and also agreed to offer a bank guarantee of ₹ 28,00,000/-. 2. After considering the reply, the adjudicating auth
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are specifically manufactured for the Government of Tamilnadu as per the Government Scheme and otherwise, the impugned goods have no marketability and cannot be sold in the open market. The manufactured fans could only be cleared against the orders by Tamilnadu State Civil Supplies Corporation for free distribution under the State Government s scheme and the said fans carried a specific logo. In the light of the above discussion, I find merit in the plea of the assessee that removal from the factory to its godown is not an act of fraud, collusion, suppression etc. to evade payment of duty since, had it been sold to third parties, the same would have amounted to an act against the Government scheme. Even the Revenue has not made out any case that the goods so removed as above have been found to be diverted and thereafter to be sold elsewhere. Thus, the only infraction of removal of goods without prior permission, is only a procedural lapse, which cannot take the characteristic of cland
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