2008 (10) TMI 243 - HC - Central Excise

Court Upholds Excise Duty Decision, Emphasizes Burden of Proof

The High Court upheld the decision of the authorities regarding the imposition of duty and penalties, emphasizing the importance of marketability of the ... Demand - Clandestine removal Issues:Appeal under Section 35G of the Central Excise Act, 1944 to set aside orders passed by the Customs, Excise & Service Tax Appellate Tribunal - Whether marketability of a product is a condition precedent in the imposition of excise dutyRs. - Whether the department failed to discharge the burden of proving the leviability of dutyRs. - Whether the order of the Tribunal is non-speaking and illegalRs. - Whether the impugned orders passed by the authorities are illegalRs.Analysis:The appeal in this case was filed by the assessee under Section 35G of the Central Excise Act, 1944 to challenge the orders passed by the Customs, Excise & Service Tax Appellate Tribunal. The case involved the interception of coated textile fabrics without proper documentation, leading to the seizure of goods by the Excise department. The appellant contended that the goods were being sent for job work of embossing a railway monogram. However, the authorities found no evidence to support this claim, and the goods were confiscated with an option to redeem along with the tempo. The appellate authority and the Tribunal affirmed the decision, reducing the redemption fine and penalty imposed. The appellant raised substantial questions of law related to marketability of the product, burden of proof on the department, legality of the Tribunal's order, and the overall legality of the authorities' decisions.The High Court, in its analysis, found that the findings of fact by the adjudicating authority, upheld by the appellate authority, were based on the evidence presented. The absence of documentation for the movement of goods and the lack of entries in the stock register were crucial factors in the decision-making process. The Court emphasized that the decision was not perverse and did not warrant interference merely because alternative views could exist. It was established that the product must be marketable for excise duty to be applicable, and the burden of proving the leviability of duty rested on the department. In this case, the Court concluded that the burden had been discharged based on the circumstances and inferences drawn from the facts on record. Since there was no indication of the findings being perverse, the Court dismissed the appeal, stating that no substantial question of law arose in the matter.In summary, the High Court upheld the decision of the authorities regarding the imposition of duty and penalties, emphasizing the importance of marketability of the product for excise duty, and the burden of proof lying with the department. The Court found no legal basis to interfere with the decision, dismissing the appeal accordingly.