Charge of Clandestine Removal Upheld; Duty Quantification to Be Reviewed; Penalty of Rs. 10,000 Stands.

The Tribunal upheld the charge of clandestine removal against the appellants based on substantial evidence, including duplicate chits and distributor statements. It remanded the duty quantification issue to the adjudicating authority, allowing the appellants the benefit of Modvat credit and cum duty realization. The penalty remained unchanged at Rs. 10,000, as determined by the Comm'r (Appeals).

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Issues involved: Alleged clandestine activities, duty demand, penalty imposition, retraction of statement, corroborative evidence, Modvat credit, cum duty realization.

Alleged Clandestine Activities:
The appellants, engaged in manufacturing satellite and cable TV equipment, were searched by Central Excise Officers resulting in the recovery of duplicate chits and incriminating documents, indicating possible clandestine activities. Statements of company partners and distributors confirmed the use of duplicate chits for clandestine deliveries and excess clearances during certain financial years.

Retraction of Statement and Corroborative Evidence:
The main contention of the appellants was the retraction of statements by one partner, arguing lack of independent corroboration and evidence such as procurement records or buyer statements. However, the Tribunal found merit in the evidence provided, including the recovery of duplicate chits, distributor statements, and consistent disclosures by the partners, concluding there was enough evidence to support the charge of clandestine removal.

Modvat Credit and Cum Duty Realization:
The appellants sought the benefit of Modvat credit on duty paid inputs and cum duty realization for duty determination. The Tribunal agreed with this contention, remanding the matter to the adjudicating authority for quantifying the duty against the appellants while upholding the reduced penalty amount imposed by the Commissioner (Appeals).

Conclusion:
The Tribunal disposed of the appeal by remanding the duty quantification issue, acknowledging the benefit of Modvat credit and cum duty realization for the appellants. The penalty amount remained unchanged at Rs. 10,000 as per the decision of the Commissioner (Appeals). The judgment was pronounced on 31-12-2004.

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