2005 (1) TMI 553 - AT - Central Excise

Tribunal remands case for fresh review by Adjudicating Authority, grants discretion on penalties and confiscation.

The Tribunal remanded all matters to the Adjudicating Authority for a fresh examination, emphasizing a comprehensive review of the evidence and providing ... Demand - Clandestine manufacture Issues:Appeal against Order-in-Original confirming Central Excise duty demand, penalty imposition for misdeclaration and clandestine manufacture and removal of excisable goods.Analysis:The judgment involves 12 appeals stemming from a common Order-in-Original confirming Central Excise duty demand against M/s. Vasu Chemicals and others for misdeclaration and clandestine activities related to the production of polishing compound bars. The advocate for the appellants argued that the Department's case was based on the diversion of raw materials by two other traders on the premises, which was refuted due to the lack of power for the necessary manufacturing process until January 1995. The appellants disputed the assumption that all despatches were of green bars and challenged the uniform freight payment basis as evidence. They contended that the production ratio of yellow and green bars was 5:1, supported by various evidence and dealer statements.The Revenue countered the submissions by reiterating the findings in the impugned order. The Tribunal considered both sides' arguments. Regarding the diversion of raw materials, the advocate admitted the charge but highlighted the lack of power for the manufacturing process until January 1995, which the Revenue failed to rebut with evidence. The Tribunal agreed with the advocate that the charge of clandestine manufacture and removal could not be sustained based on assumptions and presumptions, citing the Supreme Court's precedent. The appellants' argument about freight charges and the production ratio of yellow and green bars in the ratio of 5:1 was supported by various materials and dealer statements, which the Adjudicating Authority had not duly considered.Consequently, the Tribunal remanded all matters to the Adjudicating Authority for a fresh examination, emphasizing a comprehensive review of the evidence and providing a reasonable opportunity for the appellants to present their case. The Adjudicating Authority was granted the discretion to decide on confiscation of goods, penalties, and Central Excise duty based on the findings in the order. All appeals were disposed of accordingly, with the operative part of the order pronounced in open court on 27-1-2005.