Depot-based excise demand failed where the Revenue could not prove any Delhi depot or sales from that location.

Demand of central excise duty and penalty based on an alleged Delhi sales depot failed because the Revenue did not prove the existence of any such depot or that sales were made there. The assessee denied maintaining a depot, and neither the show cause notice nor the adjudication order identified its location. In the absence of independent evidence, the small collection towards freight and handling charges was insufficient to displace the claim that sales occurred at the factory gate. The alleged depot-based sale was therefore not established, and the demand could not be sustained.

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Issues: Whether the demand of central excise duty and penalty could be sustained on the allegation that the assessee had a sales depot at Delhi and that the goods were sold from that depot.

Analysis: The assessee denied having any sales depot at Delhi. The show cause notice and the adjudication order did not furnish the details of any such depot, including its location. No independent evidence or material was produced by the Revenue to establish the existence of the depot or to show that sales had taken place there. The collection of Re. 1 per kg towards freight and handling charges was not sufficient, by itself, to displace the assessee's claim that sales took place at the factory gate.

Conclusion: The allegation of sale from a Delhi depot was not proved, and the demand of duty and penalty could not be sustained.

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