2009 (5) TMI 436 - AT - Central Excise

Tribunal remands duty appeals, sets aside penalties, emphasizes burden of proof

AARTI STEELS LTD. Versus COMMISSIONER OF C. EX., CHANDIGARH

The Tribunal allowed the appeals by way of remand, directing the adjudicating authority to reconsider the cases in light of the principles established in ... Cenvat/Modvat- the appellants are registered dealers and the Director/Manager of registered dealers and also manufacturer of final products. He also submits that duty was demanded and penalties were imposed on the appellants on the ground that they have issued invoices without supplying the material. He submits that the appellants produced the relevant records in order to establish that the goods were supplied accompanied by invoices’ which are not considered by the lower authorities. In the light of the decision of M/s. Ranjeev Alloys Ltd. v. CCE vide Final Order dated 3-9-2008 in Appeal No. 2434/2006, held that- impugned orders are set aside. All the matters are remanded back to the adjudicating authority to decide afresh in the light of the above decision of the Tribunal. All the appeals are allowed by way of remand. Issues involved:Appeal against duty demand and penalties for issuing invoices without supplying material.Analysis:The case involved registered dealers and manufacturers facing duty demand and penalties for issuing invoices without supplying the material. The appellant argued they provided relevant records to prove goods were supplied with invoices, citing a Tribunal decision. The Revenue, however, contended that vehicle numbers on invoices were for two-wheelers, and the appellants failed to provide evidence of material supply. The Tribunal noted the Commissioner's earlier orders based on newspaper reports, setting aside demands, but changed stance due to continued practice without remedial action by appellants. The Tribunal emphasized that duty and penalties cannot be decided based on newspaper reports alone and criticized the lack of examination of appellant evidence by the Commissioner. Referring to previous cases, the Tribunal highlighted the burden on the appellant to prove receipt and use of duty-paid goods in manufacturing, especially when initial evidence shows discrepancies in transportation capacity. Consequently, the Tribunal set aside the impugned orders and remanded the matters for fresh adjudication based on the principles outlined in previous decisions.In conclusion, the Tribunal allowed the appeals by way of remand, directing the adjudicating authority to reconsider the cases in light of the principles established in previous Tribunal decisions.