2018-TIOL-1351-CESTAT-DEL

CX - Assessee engaged in manufacture of M.S. Billet, M.S. Beam and M.S. Channel - During verification of stock, it was noticed that 132 MT of Bloom/Billet was found in excess of stock recorded in statutory books - The goods found in excess were seized under belief that the same were intended to be cleared without payment of duty - After completion of investigation, a SCN was issued to assessee proposing confiscation of seized goods - Quantity of 132 MT is roughly one day's production and explanation is that this would have been accounted but for relevant documents being withdrawn by officers - Non accountal of this quantity of finished goods can be condemned in light of explanation offered by assessee - In any case, goods were found within factory and consequently, confiscation of this quantity of finished products is not justified and hence set aside - This quantity of finished goods have been manufactured but not accounted in statutory records - Consequently, goods are liable for confiscation and assessee will be liable for penalty in terms of Rule 25 of Central Excise Rules - In the result, confiscation is upheld - Keeping in mind the doctrine of equity, fairness and good conscience, redemption fine and penalty imposed merits reduction - Accordingly, redemption Fine is reduced to Rs. 20,00,000/- and the penalty is reduced to Rs. 10,00,000/-: CESTAT - Appeal partly allowed : DELHI CESTAT

2018-TIOL-1350-CESTAT-MAD

CX - Assessee engaged in manufacturing and clearing castings and cast articles of iron and steel, parts of railway, tramway and parts of machinery - It is an SSI unit and were availing the MODVAT facility under erstwhile Rule 57A of CER, 1944 - SCN was issued proposing demand of duty on iron and steel castings supplied by assessee to M/s. Neyveli Lignite Corporation, Southern Railways and Integral Coach Factory and imposed penalties under various provisions of law - Core issue in this appeal concerns whether the duty liability has been reworked out in denovo proceedings in proper compliance with directions laid down by Tribunal in its earlier final order dated 20.9.2007 - We find that the Tribunal in that order had noted that it is on record that goods were supplied against purchase orders placed on assessee by the three public sector undertakings; that neither in SCN nor in the impugned order, is there any case for Revenue that the assessee had supplied their products to any other party during the said period - Allegation was made that assessee had indulged in clandestine removal of castings during impugned period - In the first place, Tribunal vacated the penalty imposed on assessee under section 11AC for the reason that the said provisions of law was not in force during the period of dispute - Tribunal also sustained demands of duty amounting to Rs.1,32,041/- and Rs.15,404/- conceded by assessee - With such remand directions before him, it was incumbent on authority adjudicating denovo, to have analyzed the matter afresh to satisfy himself whether there was "cogent findings" based on irresistible evidence concerning the allegation that assessee had clandestinely manufactured and removed excisable goods - Tribunal is unable to find any attempt in this direction in entire impugned order - Denovo adjudication order is nothing but a rehash of earlier one which was set aside by Tribunal - The directions of the Tribunal in the Final Order dated 20.9.2007 was for the adjudicating authority to undertake a fresh relook at the evidence - When the Tribunal had vacated the penalty and which decision became final since not appealed by Revenue, how and why the Commissioner in his denovo proceedings has once again foisted even a higher quantum of penalty under different provisions - Impugned order cannot sustain and is set aside: CESTAT - Appeal allowed : CHENNAI CESTAT

CUSTOMS

2018-TIOL-165-SC-NDPS

Arif Khan @ Agha Khan Vs State of Uttarakhand

NDPS - The police had received a tip-off from an anonymous source, informing that the appellant would be arriving at a particular place, carrying a bag containing contraband - On being apprehended & questioned, he admitted to be in possession of 'Charas' - Although he was informed of his right to be searched in presence of a Gazetted Officer or Magistrate, he agreed to be searched by the police - Thereupon, about 2.5 kgs of 'Charas' was recovered from his person - The appellant was convicted for offences punishable u/s 20 of the NDPS Act - He was awarded rigorous imprisonment for 10 years with fine of Rs 1 lakh by the Sessions Court - Such decision of the Sessions Court was upheld by the High Court of Uttaranchal.

Held - The issue at hand is whether the prosecution was able to prove that the procedure prescribed u/s 50 of the NDPS Act was followed by the police officials in letter & spirit while making the search and recovery of the contraband 'Charas' from the appellant - It must also be seen whether the recovery was done in the presence of a Magistrate or a Gazetted Officer as required u/s 50 - Mere search & recovery of alleged contraband does not satisfy the mandatory requirements u/s 50, as held by this Court in Vijaysinh Chandubha Jadeja vs. State of Gujarat - Since the appellant was not produced before a Magistrate or Gazetted Officer, hence the recovery of 'Charas' was also not made in the presence of either official - Moreover, neither of the police officials part of the raid were Gazetted Officials & so were not empowered to conduct search & recovery except in presence of Magistrate or Gazetted Officer - Hence the prosecution failed to prove that search & recovery was made in presence of either a Magistrate or a Gazetted Officer - Such non-compliance of the provisions of Section 50 is fatal to the prosecution's case & the appellant is entitled to be granted acquittal: SC (Para 4-10,19,20,23,26,28,30) - Appeal Allowed : SUPREME COURT OF INDIA