Custom, Excise & Service Tax Tribunal
M/S. Pramod Auto Parts (P) Ltd vs Cce, Delhi-I on 7 October, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/Decision:07/10/2015
Excise Appeal No.E/55861/2014-EX(DB)
[Arising out of Order-in-Original No.32/D-I/2014 dated 7.11.2014 passed by the Commissioner of Central Excise, New Delhi]
M/s. Pramod Auto Parts (P) Ltd. Appellants
Vs.
CCE, Delhi-I Respondent
Appearance:
Rep. by Ms. Seema Jain, Advocate for the appellant. Rep. by Shri S. Nanthuk, Joint CDR for the respondent. For approval and signature:
Honble Smt. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?3
Whether Their Lordships wish to see the fair copy of the Order?4
Whether Order is to be circulated to the Departmental authorities?
Coram: Honble Smt. Sulekha Beevi C.S.,Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No. 53204/2015 dated:07.10.2015 Per B. Ravichandran:
The appellants are engaged in the manufacture of automobile parts and spares liable to central excise duty. On 3.06.2011, the central excise officers conducted certain verifications and thereafter, the proceedings were initiated against the appellant. The case against the appellant is that they have not discharged central excise duty on the goods manufactured and cleared by them. During the course of investigation, certain goods were seized under Rule 24 of the Central Excise Rules, 2002. The total value of finished goods, unfinished goods and raw materials is Rs.98,01,350/-. An amount of Rs.1,49,54,280/- in the form of currency was also seized by the officers under Section 110 of Customs Act, 1962. Later, on the request of the appellant, the finished goods, un-finished goods and the raw materials were released provisionally on submitting B-11 bond for an amount of Rs.98,91,350/- with a bank guarantee of Rs.24,72,838/- on 16.08.2001. The appellants were issued show cause notice dated 29.12.2001 for confiscation of the seized goods and currency and show cause notice dated 3.8.2013 for demanding duty and imposing penalty.
2. The appellants filed application before the Customs & Central Excise Settlement Commission, New Delhi under Section 32 E of the Central Excise Act, 1944. The appellants admitted the duty liability as demanded in show cause notice and sought direction to use the seized currency towards such admitted liability. The Settlement Commission while expressing interest in settling the case advised the applicant to approach jurisdictional Commissioner for release of seized amount. Consequently, the application was rejected by the Settlement Commission for non-compliance with the conditions laid down in the above Section as they could not make payment of admitted liability along with interest for settlement of the case.
3. Against the order of Settlement Commission, the appellant filed a writ petition before the Honble High Court at New Delhi. The Honble High Court vide their order dated 13.08.2014 disposed of the writ petition with the direction to the appellant to file an application for provisional release of the seized amount and directing the central excise authorities to pass an appropriate order in accordance with the law. Thereafter, the impugned order was passed by the Commissioner on 7.11.2014 rejecting appellants request for release of the currency seized. Aggrieved by this order, the appellant has filed this appeal.
4. During the course of argument, ld. Counsel for the appellant narrated the chronological events of each stage in this case. She submitted that the ld. Commissioner erred in rejecting their request for provisional release of the currency seized on the ground that the provisions of Section 110 A of Customs Act, 1962 is not made applicable to the Central Excise. She argued that when the seizure was effected, the currency was seized as goods in terms of Section 110 of the Customs Act, 1962, the Original Authoritys finding that there is no provision in Central Excise Act or Rules to provisionally release the currency seized is legally unsustainable. The authority, who has powers to seize, has the power to provisionally release the said goods. She adverted that this is clear from the instructions contained in Central Excise Manual (Chapter 17, para-3.2). It is clearly mentioned therein that the power to release the seized goods emanates from the power to seize. The Manual further states that the goods seized may be released provisionally under bond with 25% of security or surety by the officer who is normally competent to adjudicate the case. Hence, the ld. Counsel for the appellant strongly contested the findings of the original authority that there is no provision under Central Excise Act, 1944 for provisionally releasing the currency seized as sale proceeds of non-duty paid goods.
5. Ld. Authorized Representative, on the other hand, reiterated the findings of the original authority and stated that the provisions of Section 110 A of the Customs Act, have not been made applicable to central excise and as such, the Commissioner is right in refusing the provisional release of the currency.
6. Heard both the sides and examined the appeal records.
7. The point for consideration is the correctness of the Original Authoritys decision for refusing the provisional release of the seized currency to the appellant. The reason quoted by the ld. Commissioner is that there is no provision under Central Excise Act, 1944 to provisionally release the currency and it will also jeopardize the interest of the Revenue because of the involvement of huge duty and interest in this case.
8. Regarding the non-availability of requisite provision of law for provisional release of the seized currency under Central Excise Act, 1944, we find that the Commissioner is in error. We find that the seizure of currency in the present case is made under Section 110 of the Customs Act, 1962 on the reasonable belief that they are sale proceeds of clandestinely manufactured and cleared excisable goods which are liable for confiscation. Section 110 of the Customs Act states that if the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods. Section 2 (22) of the Customs Act defines goods which includes currency. Since seizure of currency is made adopting the definition of goods as contained in Section 2(22) of the Customs Act, 1962 and considering it as goods, the ld. Commissioners observation that the definition of goods as per Section 2 (22) of the Customs Act, 1962, which includes currency, has not been made applicable to the Central Excise vide notification no.68/63-CE is factually incorrect. If this view is to be accepted, the seizure of currency in the present case itself will become untenable as there is no other provision under Central Excise Act, 1944 for seizing currency. The definition in the Act confines to excisable goods. Hence, it is clear that the seizure of currency is made by the officer adopting the definition in the Customs Act and the said provision treats the currency as goods which can be seized. Here, we notice that on 16.08.2011, the Dy. Commissioner (AE) ordered the provisional release of seized goods other than currency on submitting B-11 Bond for Rs.98,91,350/- and bank guarantee of Rs.24,72,838/-. No legal authority has been quoted in the communication. The Department does not have a case that the provisional release of the seized goods as ordered on 16.08.2011 is not authorized by the law. Hence, applying a different treatment for the currency which is seized as goods (sale proceeds of non-duty paid goods) is not legally sustainable.
9. Ld. Authorised Representative could not explain under which provision the goods seized were released on 16.08.2011 and to have a different treatment for the currency seized in the same case. In other words, the power, which is applicable for the release of the provisional release of the seized goods is equally applicable to the provisional release of seized currency as sale proceeds of offending goods. Ld. Commissioners observation that there is no specific provisions under Central Excise Act, 1944, for provisional release of the seized currency is contrary to the guidelines mentioned in the Central Excise Manual and Departments own action for releasing the seized goods. Incidentally, we notice that the show cause notice dated 29.12.2011 issued proposing confiscation of the seized currency proposes such confiscation under Section 122 of the Customs Act, 1962. We find that though the said Section is not made applicable to Central Excise, it has been invoked by the officer to confiscate the currency. We find Section 34 of the Central Excise Act, 1944 stipulates that wherever confiscation is adjudged under this Act or Rules made thereunder, the officer adjudging it, shall give the owner of goods an option to pay in lieu of confiscation such fine as the officer thinks fit. As such, even after adjudication absolute confiscation is not available in Central Excise.
10. The second reason mentioned by the ld. Commissioner for refusing the provisional release of the seized currency is that it may jeopardize the interest of the Revenue. We have already noted that the seized goods valued at almost Rs.1 Crore have been provisionally released by the Revenue on 16.08.2011 on execution of Bond for equal amount with 25% bank guarantee. We find no legal basis for a different treatment for seized currency as sale proceeds. Regarding safeguarding the interest of the Revenue, we find that the provisional release of the currency is sought by the appellant only to discharge the demanded duty liability along with interest so that their case can be settled by the Settlement Commission. We find that realizing the full admitted duty liability along with interest is in the interest of the Revenue. The appellant vide their letter dated 17.06.2014 and again letter dated 7.4.2014 addressed to the jurisdictional Commissioner sought for appropriation and adjustment of the seized cash towards demand of duty and applicable interest. Even before the Honble High Court, they have pleaded that they required the seized cash to be provisionally released to discharge duty liability with interest in this case so that they can approach again to the Settlement Commission for settling the case. Thus, infact, release of the amount for payment of duty for settling the case would only safeguard the interest of Revenue.
11. Considering the legal position and keeping the interest of Revenue also, we find that the appellant is eligible for provisional release of the cash seized on similar terms already considered by the Revenue while releasing the seized goods. We order accordingly and dispose of the appeal.
[operative portion already pronounced in the open court] ( Sulekha Beevi C.S.) Member (Judicial) ( B. Ravichandran) Member (Technical) Ckp.
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