2004 (4) TMI 199 - AT - Central Excise

Manufacturer's Excise Duty Penalties Overturned due to Insufficient Evidence

The Tribunal set aside the duty demand, penalties, and redemption fines imposed on the manufacturer of plastic moulded parts for alleged clandestine ... Confiscation, fine and penalty - Clandestine manufacture and removal - Evidence, corroborative evidence Issues:Alleged clandestine clearance of excisable goods without payment of Central Excise duty, confirmation of duty demand, penalties, and redemption fines imposed, appeal against adjudication order negatived by Commissioner (Appeals).Analysis:The case involved the main appellant, a manufacturer of plastic moulded parts of mixers and grinders, who were alleged to have engaged in clandestine clearance of excisable goods without paying Central Excise duty. The department claimed that the appellants did not reflect this production and clearance in their records and maintained details of clandestine clearance in kachha records, which were recovered during a search of the factory premises. A duty demand of Rs. 47,593/- for alleged past clearance and a demand of Rs. 1,039.50 on seized goods were confirmed, along with penalties and redemption fines. The Commissioner (Appeals) upheld the adjudication order, leading to the appeal to the Tribunal.The Tribunal noted that the total value of clearances of excisable goods during a specific period was Rs. 45,86,449/-, comprising four parts. The appellants contested the entries in the kachha slips and rough book, claiming they were related to trade inquiries, not clandestine removals. The department, however, believed these entries were unaccounted sales. Both parties failed to corroborate their versions, with the department unable to confirm the authenticity of transactions due to lack of specific details. The adjudicating authority considered the sketchy details of customers sufficient and held the figures in the kachha slips as actual sales.The Tribunal observed that without independent corroboration, it was not possible to support either party's claim. It emphasized the burden on the department to prove its case with credible evidence. The evidence in the form of kachha slips was deemed inadequate to support the allegation of clandestine clearance, as it did not conclusively suggest sales. The common names in the records could have been used to conduct further investigations, but the available evidence was insufficient to conclude clandestine clearance.Regarding another part of the case, a piece of paper recording stock as of a specific date was deemed unreliable as the author was unidentified, and no correlation with other factory records was established. Consequently, the Tribunal found this evidence unacceptable to support the allegation. As a result, the seizure, confiscation, and penalties imposed were set aside, and all appeals were allowed with consequential relief in accordance with the law.