2008 (7) TMI 733 - AT - Central Excise

Tribunal dismisses Revenue's appeal due to lack of evidence supporting duty demand for re-rolled iron and steel products

The Tribunal upheld the lower appellate authority's decision, dismissing the Revenue's appeal against the dropping of a duty demand for re-rolled iron and ... Demand and penalty Issues:Appeal against dropping of duty demand for re-rolled iron and steel products; Allegations of clandestine manufacture and clearance; Authenticity of corroborative evidence; Rejection of lower appellate authority's findings; Lack of representation by respondents.Analysis:In this case, the appeal by the Revenue challenges the dropping of a duty demand of Rs. 4,99,347 for the period 1994-95 and 1995-96 concerning re-rolled iron and steel products. The original authority alleged clandestine manufacture by the respondents using scrap from a specific company. The Commissioner (Appeals) set aside the duty demand due to lack of evidence of clandestine activities.The department argues that there was authentic corroborative evidence supporting clandestine manufacture, including witness statements and documents. They emphasized a statement by an employee of the scrap supplier indicating the scrap's potential for re-rollable use. The department contested the findings of the lower appellate authority regarding the conversion of scrap and the non-appearance of witnesses for cross-examination.Despite notice, the respondents did not appear or request an adjournment. Upon review, the Tribunal noted crucial findings by the lower appellate authority, highlighting the lack of evidence supporting the allegations of illicit manufacture. The Commissioner (Appeals) questioned the profitability motive behind the alleged clandestine activities, deeming it unlikely for the minimal profit margin suggested by the Revenue. The Tribunal found no material presented by the appellant to challenge the lower authority's findings.Ultimately, the Tribunal upheld the lower appellate authority's decision, dismissing the appeal. The judgment emphasized the discrepancy between the allegations made in the show-cause notice and the arguments presented in the appeal, indicating a lack of substantial evidence to support the Revenue's claims.