2018 (10) TMI 967 - AT - Central Excise

Tribunal Remands Case for Lack of Clarity in Duty Payment, Emphasizes Evidence Burden

Jojo Joseph, Tolin Rubbers Pvt Ltd, Toja Tyre And Treads Pvt. Ltd., K.V Tolin And K.P Varkey Versus C.C.,C.E. & S. T-Cochin

Jojo Joseph, Tolin Rubbers Pvt Ltd, Toja Tyre And Treads Pvt. Ltd., K.V Tolin And K.P Varkey Versus C.C.,C.E. & S. T-Cochin - TMI Issues Involved:1. Alleged clandestine removal of tread rubber without duty payment.2. Burden of proof on the Department regarding the allegations.3. Joint confirmation of duty on multiple companies without specifying individual liabilities.Analysis:Issue 1: Alleged Clandestine RemovalThe Department alleged that the appellants engaged in clandestine activities by diverting Carbon Black and not accounting for natural rubber in the production of tread rubber. Various pieces of evidence, such as computer printouts, bar code slips, and dealer statements, were used to support the claim of clandestine removal.Issue 2: Burden of ProofThe appellants argued that the evidence presented by the Department was inconclusive and lacked corroboration. They challenged the validity of the evidence related to Carbon Black diversion, natural rubber procurement, computer printouts, and alleged benami accounts. The appellants emphasized the need for concrete proof of all raw material usage, electricity consumption, transportation, and sale proceeds for a charge as serious as clandestine removal.Issue 3: Joint Confirmation of DutyThe Tribunal noted that while the Department accused both appellant companies of clandestine activities, the duty demand was jointly confirmed without specifying individual liabilities. The appellants contended that each company had paid duty separately in the past, indicating their independent existence. Citing legal precedents, the Tribunal highlighted the necessity of clarity in confirming demands against specific entities to ensure proper execution and avoid ambiguity in recovery proceedings.The Tribunal, after considering the arguments presented, concluded that due to the lack of clarity in specifying individual liabilities and the potential difficulties in execution, the matter should be remanded to the Commissioner for a definitive determination on whom the duty demand should be confirmed. The decision to remand the case was made in the interest of justice to ensure a fair and precise resolution.In summary, the Tribunal's judgment focused on the burden of proof, the necessity of concrete evidence in serious allegations, and the importance of clarity in confirming duty demands against specific entities to facilitate proper execution.