Confiscation of cash in central excise
Confiscation of cash in central excise
Confiscation of cash in central excise
The revenue is also empowered to invoke any provisions of custom act through a notification as per section 12 of central excise act 1944. One of the stringent provisions of the custom act is section 121, which says that sale proceeds of the smuggled goods can be confiscated by the authorities, is extended in the matters of central excise. The provision of the section 121 of the custom act is a stringent provision which is very harsh in nature and can inflict deep injury if not used cautiously. It has been observed that despite conditions and riders mentioned in the section itself and despite safeguard provided by the legislature the authorities are invoking the provision of section 121 of custom act recklessly and misused of the same are rampant. This paper will try to highlight the points which the authorities must consider before invoking section 121 of the custom act in order to seize cash at a time of investigation.
Section 121 of the custom act read as follow:
"Section 121. Confiscation of sale-proceeds of smuggled goods. Where any smuggled goods are sold by a person having knowledge or reason to believe that the goods are smuggled goods, the sale-proceeds thereof shall be liable to confiscation."
Here smuggled goods shall be deemed to be excisable goods which have been removed in contravention of any provision of the central excise rule 1944. [Notification no. 68/63/CE dated 04.05.1963 as amended by various notification till notification no. 33/97/CE (N.T.) dated 11.05.1999].
So if we talk in excise terms section 121 of the custom act 1962 says that following conditions must be satisfied before invoking this section, they are as follows:
The excisable goods must be sold.
The seller must be aware that the sale of excisable goods is being done in contravention of central excise rules.
The sale proceeds must be related to the transaction in which goods are sold in contravention of central excise rules.
These criteria of invoking section 121 of the custom act are mandatory in nature and in no circumstances it can be by passed by the revenue. Merely because some cash or huge amount of cash is available in the factory premises or residence of the manufacturer, the authorities are not empower to confiscate the same unless until a clear and unambiguous nexus is established that cash available is the sale proceeds of the goods which were removed in contravention of the central excise rules. Unless until this is done the confiscation is not justified and is only one of the pressure tactics adopted by the revenue to force the accessee to accept un sustainable allegation.
No confiscation of the cash can be done on mere belief or suspicion by the department that the cash found is related to the sale proceeds of the goods clandestinely removed, more over when the presence of cash is amply explained. Following are the guidelines pronounced by the court which must be kept in mind by the authorities at the time of invoking section 121 of the custom act:
No confiscation on the basis of suspicion: The suspicion remains a suspicion how soever strong it is, in the absence of reasonable evidence in this regard. The mere possession of cash is no offence in excise and unless it is related with the sale of goods clandestinely removed of without payment of excise duty.
(i). Malar Vs. CC 1988 (33) ELT 444.
Burden of proof always lies of department: it is a common prudence that the person who makes the allegation is required to prove the alligation.
(i) Abdul Razak Hazi Ismail Vs. CC (Prev) Mumbai, 1999 (108) ELT 283, (ii) K.P. Basheer Vs. CCE, 1999 (109) ELT 247, (iii) CC, Jaipur Vs. Jagdish Prasad Soni, 2003 (158) ELT 457.
Sale proceeds must be of immediate sale: For confiscation of under section 121 of custom act the cash available must be immediate sale proceeds and it is not sufficient that some times in past money involved were tainted.
(i) LKP Merchant Financing Ltd Vs. CC, 2005 (180) ELT 233, (ii) B.P. Nayak Vs. CC (P) Mumbai, 2001 (136) ELT 604.
So, the legislative intention regarding section 121 of the custom act and its judicial interpretation are apparent and the same must be respected in its letter and spirit, which only says that section 121 should be invoked in order to stop the duty evasion and it should not be a tool to harass the assessee. The Honble Tribunal in the matter of Pandit D.P.Sharma Vs CCE, Calcutta [2001 (137) E.L.T 692- Tribunal] reiterated the settled principle in this regard as follows:-
"it has been laid down time and again in various judgements that the onus to prove that the Indian currency in question is the sale proceeds of the clandestinely removed goods is upon the revenue, which is required to be discharged by production of an affirmative tangible and positive evidence."
Cash In 1 Hour - Acquire Funds For Daily Use Into Your Account How To Get Great Leads To Your Online Business Opportunities Website By Writing Quality Articles Cash Fast Loans No Credit Checks No Faxing – Instant Money Without Any Stress Start an Online Business - Making Money Online Starts With You Cash Loans No Faxing: Fetch Immediate Funds For Pending And Other Basic Needs Promotional Printing: Helping Corporate Business To Achieve Milestones Custom USB Drives Can Help You Promote Your Business Do Some Research Before Starting An Affiliate Marketing Business Unsecured Loans Uk: Risk Free Way To Get Faster Cash IP telephony based small business phones work save you money Cash From Your Camera Tips To Make Money From Social Photography Task Management and the Small Business Is It Better To Buy Or Lease Commercial Space For My Business