2002 (11) TMI 426 - AT - Central Excise

Tribunal upholds Central Excise duty demand but reduces penalty, citing lack of timely evidence

The Tribunal upheld the Central Excise duty demand for the period 1983-84 against the Appellants but reduced the penalty imposed. Despite the Appellants' ... Natural justice - Demand Issues:- Central Excise duty demand for the period 1983-84 and penalty imposition.- Delay in adjudication proceedings.- Capacity of the Appellants to manufacture the alleged quantity of goods.- Submission of certificate dated 19-6-90 and its relevance.- Evidence regarding the clearance of goods and the quality of goods produced.Central Excise Duty Demand and Penalty Imposition:The appeal was filed against the Adjudication Order confirming the demand of Central Excise duty for the period 1983-84 and imposing a penalty. The Appellants manufactured latex foam articles and availed certain exemptions. The Central Excise Officers intercepted a consignment in transit, leading to the issuance of a show cause notice for duty demand. Despite multiple adjudications and remands, the demand was confirmed, but the penalty was reduced to Rs. 2 lakhs.Delay in Adjudication Proceedings:The Appellants argued that the delay in adjudication proceedings rendered the order unsustainable. However, the Tribunal found no merit in this contention. It was noted that the Appellants failed to submit crucial evidence and submissions promptly after the remand, leading to the continuation of proceedings. The Tribunal emphasized that the delay did not violate principles of natural justice as the Appellants did not take necessary steps promptly.Capacity of the Appellants and Certificate Submission:The Appellants contended that they lacked the capacity to manufacture the quantity of goods alleged. They produced a certificate dated 19-6-90 before the Tribunal, shedding light on their machinery capacity. However, they failed to submit this certificate to the Adjudicating Authority earlier. The Tribunal held that the Appellants should have provided this certificate and relevant submissions promptly, which they failed to do.Evidence and Quality of Goods Produced:The demand of duty was confirmed based on documents seized from the Appellants' and buyers' premises. The Appellants claimed that most goods were returned due to defects, but they failed to provide supporting records. The Tribunal found no evidence to prove that cleared goods were rejected items after reprocessing. The certificate obtained after six years was deemed irrelevant to the 1983-84 period. Consequently, the demand was upheld, but the penalty was reduced.In conclusion, the Tribunal upheld the Central Excise duty demand but reduced the penalty, emphasizing the Appellants' failure to provide timely evidence and submissions, and the irrelevance of the certificate obtained after a significant delay.