1997 (7) TMI 593 - AT - Central Excise

Tribunal reduces penalty for firm and absolves proprietor due to lack of evidence

The Tribunal upheld the confiscation of biris but set aside the duty demand, reducing the penalty on the firm and absolving the proprietor of the penalty. ... Accountal of goods - Confiscation - Demand - Clandestine removal Issues Involved: Confiscation of biris, duty demand, personal penalties, discrepancy in records, reliance on private record.Confiscation of Biris: The Collector of Central Excise ordered the confiscation of biris under Rule 209 of Central Excise Rules, 1944, and provided an option for redemption upon payment of a fine. The appellant challenged the order citing various reasons such as bags being duty paid, bags returned by customers, and unrecorded production.Duty Demand: A substantial duty amount was demanded from the appellant for biris surreptitiously removed, based on a private record maintained by individuals not directly associated with the appellant. The appellant denied knowledge of this record, and the Tribunal emphasized the need for verification and independent evidence in cases of clandestine removal.Personal Penalties: Personal penalties were imposed on the firm and the proprietor under relevant rules. The appellant argued lack of opportunity for cross-examination and relied on previous Tribunal decisions to support their case.Discrepancy in Records: The Commissioner noted discrepancies in the recorded stock of biris, including unlabelled biris and those not entered due to clerical reasons. The appellant's explanations regarding excess stock and production discrepancies were found insufficient, leading to the confirmation of confiscation.Reliance on Private Record: The Revenue relied on entries made by the appellant's employees without thorough investigation or corroboration from other sources. Following precedents, the Tribunal set aside the duty demand due to lack of verifiable evidence and benefit of doubt to the appellant.Conclusion: The Tribunal upheld the confiscation of biris but set aside the duty demand, reducing the penalty on the firm and absolving the proprietor of the penalty. The decision was based on the insufficiency of evidence and lack of verification regarding the duty demand.