2002 (2) TMI 219 - AT - Central Excise

Tribunal decisions vary for Ghoorpur and Phoolpur factories on duty and penalties

The Tribunal set aside duty and penalties for the Ghoorpur factory due to lack of evidence, while confirming duty and penalties for the Phoolpur factory ... Demand - Limitation - Clandestine manufacture and removal Issues:Confirmation of duty and penalties against the appellants based on alleged evasion of excise duty through suppression of production and clandestine removal of hand-made biris.Analysis:The appeals were filed against an order confirming duty and penalties against the appellants for alleged evasion of excise duty by suppressing production and clandestine removal of hand-made biris. The firm, a partnership engaged in biri manufacturing, was accused of evasion based on private records recovered during a search. The duty demands were contested, arguing that the evidence was insufficient and lacked corroboration. The Tribunal noted that the duty demand was solely based on private records without additional evidence such as raw material purchase records or statements from suppliers or buyers. It was observed that no effort was made to collect evidence on raw material purchase, electricity consumption, or clandestine removal. The Tribunal held that the duty demand on the Ghoorpur factory could not be legally confirmed due to lack of evidence and failure to prove suppression during the period when the factory was under departmental control.Regarding the Phoolpur factory, part of the demand was confirmed based on challan books and forensic reports indicating clandestine removal. The Tribunal upheld this part of the demand as evidence supported the removal without duty payment. However, for the remaining duty amount, no cogent evidence was found to prove clandestine removal. The Tribunal cited previous cases emphasizing the need for corroborative evidence for duty demands to be sustainable. Consequently, the duty demand for the balance amount on the Phoolpur factory was set aside.Regarding penalties, leniency was requested due to financial hardship and personal circumstances of the appellants. The penalties were reduced for some appellants and set aside for others based on individual situations. The Tribunal modified the order by setting aside duty and penalties for the Ghoorpur factory while confirming duty and imposing penalties for the Phoolpur factory.In conclusion, the Tribunal set aside duty and penalties for the Ghoorpur factory but confirmed duty and penalties for the Phoolpur factory based on specific evidence. The appeals were disposed of accordingly, considering the evidence and circumstances presented during the proceedings.