2026-VIL-1887-CESTAT-DEL-CE
  1. Home
  2. 2026-VIL-1887-CESTAT-DEL-CE

CENTRAL EXCISE CESTAT Cases

Central Excise - Liability of a trader alleged to have goods manufactured through job workers - Rule 25 of the Central Excise Rules, 2002 - Search at the premises of the Appellant, a proprietary trading concern, revealed excess stock of electrical goods and cash. The registration which the Appellant had applied for was revoked, as verification found no power connection, plant and machinery. SCN alleged that the goods were manufactured by job workers on the Appellant's account and cleared without payment of duty. It demanded duty and proposed confiscation of the goods and cash with penalties, which the authorities below confirmed. The Appellant contended that it was only a trader. The Department relied on a statement that goods were got manufactured from job workers on the Appellant's account - Whether the Appellant is a manufacturer liable to duty and whether the goods are liable to confiscation - HELD - The premises had no electricity connection, plant and machinery or other infrastructure for manufacture, so the Appellant cannot be held to be a manufacturer. No investigation was conducted with the job workers, and no job worker came forward to state that goods were manufactured on behalf of the Appellant. If goods are manufactured by a job worker, the job worker is the manufacturer and is liable to pay duty. The Appellant being only a trader, the goods cannot be seized on the premise that they were meant for clandestine removal - The seizure, confiscation, redemption fine and duty are set aside, and no penalty is imposable on the Appellant or its representatives - Confiscation of excess goods and cash found with manufacturer - Rule 25 of the Central Excise Rules, 2002 - Excess electrical goods not entered in the RG-1 register were found at the premises of the Appellant, a registered manufacturer. Cash was found at the factory and at the residences of its directors. The authorities below confiscated the goods and cash and allowed redemption of the goods on payment of fine. The Appellant contended that the goods were work in progress, as they had to be tested, repacked and affixed with MRP stickers, and were later cleared on payment of duty. It explained the cash as the cash book balance, the personal property of family members and an advance received for sale of property - Whether the excess goods and cash are liable to confiscation - HELD - No investigation was conducted to establish that the excess goods were finished goods meant for clandestine removal. It does not appear that the goods had test reports and MRP stickers affixed, so the contention that they had not reached the stage of finished goods is acceptable. The advance was entered in the cash ledger before the search and supported by an agreement, and the other amounts were explained. The cash cannot be said to be sale proceeds of clandestine clearance in the absence of evidence by the Revenue - The goods are not liable for confiscation, the redemption fine and penalty are set aside, and the cash is to be refunded - Duty on packing, repacking and affixing MRP stickers by unregistered unit - Section 2(f)(iii) of the Central Excise Act, 1944 - The Appellant, an unregistered company, was engaged in packing, repacking and affixing MRP stickers on goods. SCN demanded duty on the clearances, treating the activity as manufacture, and proposed confiscation of the goods and penalty. The Appellant contended that the goods already suffered duty at the hands of the supplier - Whether duty, confiscation and penalty are sustainable on the Appellant - HELD - The goods were MRP based, and the supplier had already paid duty on them after taking the abatement. The assessable value did not change after the MRP stickers were affixed. The Appellant being unregistered could not take CENVAT credit, and the duty payable by it would be equal to the credit available. It is a revenue neutral situation, and the non-availment of CENVAT credit amounts to payment of duty - The demand of duty, confiscation, redemption fine and penalty are set aside - Penalty on proprietor and directors - Rule 26 of the Central Excise Rules, 2002 - Penalties were imposed on the proprietor and the directors of the concerns - Whether penalty can be imposed on the proprietor and directors - HELD - The case made out by the Revenue against the concerns is not sustainable, so no penalty can be imposed on the proprietor and the directors - The penalties are set aside and the appeals are allowed.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Dr. G. Gokul Kishore

Weekly Summary

VIL Video

GST Adjudication & Appeals Reform
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?