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of <h1>Tribunal sets aside Rs. 17,98,988.74 duty demand, imposes Rs. 5,000 penalty. Appeal partly allowed.</h1> The Tribunal set aside the duty demand of Rs. 17,98,988.74 and the corresponding penalty, while upholding duty demands of Rs. 7,020/- and Rs. 26,660/-. A ... Demand - Clandestine manufacture and removal - Evidence - Penalty - Shortages of goods not contested Issues:Duty demand for yarn removal in a clandestine manner under the garb of waste.Analysis:The appeal was filed against the Order-in-Appeal affirming the duty demand of Rs. 18,47,443/- and an equal amount of penalty for the period April 1992 to January 1993. The appellants, engaged in manufacturing PPMF yarn, were accused of removing yarn without payment of duty in the guise of waste. The officers found discrepancies in the waste generation compared to production records, leading to a duty demand. The investigation revealed unaccounted yarn boxes and inconsistencies in log book entries. Show cause notices were issued, confirming duty demand and imposing penalties on the appellants and other employees. The Commissioner (Appeals) upheld the duty demand and penalties.Regarding the duty liability for yarn removed for testing and found short, the Counsel did not contest the demands. The Tribunal upheld the order confirming these demands. However, the contested duty demand of Rs. 17,98,988.74 was based on alleged clandestine removal of yarn under the pretext of waste. The authorities relied on log book entries by shift engineers, which the Tribunal found inconclusive. The entries indicated excess waste generation, not excess yarn production. The shift engineers expressed concerns about heavy waste, suggesting no clandestine yarn removal. The Tribunal emphasized the lack of evidence showing excess consumption or production by the appellants. Clandestine removal charges require tangible evidence, not assumptions. The Tribunal found the log book entries insufficient to support the duty demand, setting it aside.Consequently, the Tribunal set aside the duty demand of Rs. 17,98,988.74 and the corresponding penalty, upholding duty demands of Rs. 7,020/- and Rs. 26,660/-. A penalty of Rs. 5,000/- was imposed on the appellants for the upheld duty amounts. The appeal was partly allowed, providing consequential relief as permissible under the law.
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