1998 (2) TMI 252 - AT - Central Excise

Challenged duty demand & penalty imposition upheld; Tribunal emphasizes burden of proof in customs appeal

The appeal challenged the order-in-original directing the appropriation of a Bank Guarantee and confirming a duty demand for clearances beyond entitlement ... Value of clearances Issues:- Appropriation of Bank Guarantee- Duty demand for clearances beyond entitlement under Notification No. 175/86- Penalty imposition- Confiscation of seized goods- Allegations of clandestine removal- Burden of proof on the DepartmentAppropriation of Bank Guarantee:The appeal challenged the order-in-original directing the appropriation of Rs. 14,000 of a Bank Guarantee against the provisional release of seized rubber belting rolls. The Collector confirmed a duty demand for clearances beyond entitlement under Notification No. 175/86 and imposed a penalty of Rs. 50,000.Duty Demand and Confiscation:The appellants, engaged in rubber belting manufacture, faced duty demand for clearances exceeding entitlement under Notification No. 175/86. The Collector found no evidence of accounting for seized goods, leading to their liability for confiscation under Rule 173Q. Despite lack of proof on raw material receipt and use, the duty demand of Rs. 1,32,983.26 was confirmed.Allegations of Clandestine Removal:The appellant argued against presumptions of raw material use and clandestine removal. They contested the Collector's reliance on a Project Report for calculating clearances, highlighting fluctuations in fabric prices and lack of evidence on chemical purchases. The Collector's conclusions were criticized for being based on assumptions and presumptions, rendering the duty demand unsustainable.Burden of Proof:The appellant emphasized the burden of proof on the Department, citing legal precedents. The Department's failure to substantiate allegations of clandestine removal and raw material use supported the appellant's position. The Tribunal acknowledged the lack of concrete evidence and ruled in favor of the appellant, setting aside the impugned order.This comprehensive analysis highlights the issues of Bank Guarantee appropriation, duty demand exceeding entitlement, confiscation of seized goods, allegations of clandestine removal, and the burden of proof on the Department. The judgment underscores the importance of concrete evidence in establishing liability and the application of legal precedents in determining the outcome of the appeal.