2004 (3) TMI 581 - AT - Central Excise

Tribunal overturns duty demand due to lack of evidence and flawed findings.

The Tribunal allowed the appeal, setting aside the duty demand of Rs. 3,94,435 under Rule 9(2) for the clearance of goods without payment of duty. The ... Confiscation and penalty Issues: Duty demand under Rule 9(2), Penalty under Rule 173Q, Confiscation, Proper documentation for goods transportation, Alleged clandestine removal, Scrutiny of factory records, Chain of documents verification, Removal without payment of dutyDuty demand under Rule 9(2):The appeal was against the rejection of the appeal by the Commissioner of Central Excise (Appeals) regarding the duty demand of Rs. 3,94,435 confirmed against the appellant under Rule 9(2) for the clearance of 'surf' without payment of duty. The goods were transported from the appellant's godown at Siliguri to Gauhati in Assam without proper documentation, leading to the duty demand.Proper documentation for goods transportation:The adjudication order noted that the goods were transported from the factory through trucks up to Siliguri and then transhipped for onward journey to Gauhati. The issue arose from the lack of proper documentation accompanying the goods during transportation, which led to the conclusion that the goods were removed without accounting for them in the Central Excise records, contravening various rules.Alleged clandestine removal:The order-in-original alleged that the goods were manufactured and removed in a clandestine manner without proper recording of production and payment of due duty. However, the lack of scrutiny of factory records to support this conclusion raised doubts about the validity of the claim.Chain of documents verification:Upon reviewing the chain of documents, including Transporter's Consignment Note, Manufacturer's Invoice, Sales Tax Form XXIV, and Bill of sale, it was revealed that the goods covered by the manufacturer's invoice did reach Gauhati, with the change of truck documented at Siliguri. The change of trucks was attributed to entry permit issues for Assam, indicating a legitimate reason for the transhipment.Scrutiny of factory records:The order lacked evidence of scrutiny of factory records to support the allegations of clandestine removal and improper accounting of goods. The absence of such verification raised questions about the basis on which the conclusions were drawn regarding the alleged offenses.Conclusion:The Tribunal found the findings of the lower authorities unsustainable due to self-contradictions in the order and lack of substantial evidence to support the charges. The appeal of the appellants was allowed, setting aside the previous orders and providing consequential relief in accordance with the law.