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of <h1>Tribunal grants stay in duty waiver case due to lack of evidence</h1> <h3>CHANDAN TOBACCO COMPANY Versus COMMISSIONER OF C. EX., VAPI</h3> CHANDAN TOBACCO COMPANY Versus COMMISSIONER OF C. EX., VAPI - 2011 (268) E.L.T. 286 (Tri. - Ahmd.) Issues:Prayer to dispense with pre-deposit of duty and penalty under Rule 25(1) of Central Excise Rules, 2002 based on findings of clandestine removal of gutkha. Interpretation of circular requiring manufacturers to submit declarations. Discrepancy between declared average production and actual production leading to demand confirmation. Allegations of clandestine manufacture and removal based solely on declared production. Arguments regarding duty payment based on actual production vs. declared average production. Lack of evidence on excess raw material procurement or buyer identification. Evaluation of appellant's submissions and Revenue's counterarguments. Commissioner's observations on willful suppression of facts and penalty imposition under Rule 25. Decision on granting unconditional stay and fixing final disposal date.Analysis:The judgment dealt with an application seeking to waive the pre-deposit of duty and penalty imposed on the appellant for alleged clandestine removal of gutkha. The case revolved around the interpretation of a circular mandating manufacturers to submit declarations, with the Revenue contending that the appellant underreported production, leading to demand confirmation. The appellant argued that duty should be based on actual production, not declared averages, citing various operational hindrances affecting production levels. They highlighted the lack of evidence on excess raw material procurement or buyer identification, challenging the clandestine removal allegations solely based on declared production figures.The Tribunal noted that the Revenue's findings primarily relied on the declared average production, without substantial evidence of clandestine activities like excess raw material receipt or unauthorized sales. The Commissioner's order acknowledged the appellant's regular declarations and observations, indicating no willful suppression of facts. The Tribunal emphasized that theoretical production capacity calculations cannot form the basis for alleging clandestine removal, supporting the appellant's prima facie case for an unconditional stay.Considering the significant revenue involved, the Tribunal scheduled the appeal for final disposal on a specific date. The judgment underscored the importance of factual evidence and actual production data in determining duty liability, cautioning against relying solely on declared averages for alleging clandestine activities. The decision to grant an unconditional stay reflected the Tribunal's recognition of the appellant's arguments and the lack of substantial evidence supporting the Revenue's claims, emphasizing the need for a thorough evaluation of factual circumstances in excise duty matters.
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