1998 (12) TMI 220 - AT - Central Excise

Tribunal affirms duty demand, penalties; dismisses appeal on admissibility, natural justice violations

The Tribunal upheld the Commissioner's order confirming a duty demand of Rs. 4,14,375/-, penalty of Rs. 20,000/-, and redemption fine of Rs. 10,000/-. The ... Demand - Clandestine removal - Evidence - Admissibility Issues Involved:1. Legitimacy of the duty demand and penalty imposed.2. Allegation of clandestine removal of MS Ingots.3. Admissibility and reliability of attested photo copies of ST-39 forms.4. Violation of principles of natural justice.5. Explanation for excess stock of MS Ingots found during inspection.Detailed Analysis:1. Legitimacy of the Duty Demand and Penalty Imposed:The appellants challenged the order of the Commissioner of Central Excise, Jaipur, which confirmed a duty demand of Rs. 4,14,375/- and imposed a penalty of Rs. 20,000/-. Additionally, a redemption fine of Rs. 10,000/- was demanded. The appellants argued that the entire case was fabricated as they were not provided with original or legible copies of the ST-39 forms relied upon by the Department.2. Allegation of Clandestine Removal of MS Ingots:The Department alleged that the appellants had clandestinely removed 636.525 MT of MS Ingots without payment of duty, supported by attested photo copies of ST-39 forms. The appellants contested the evidentiary value of these documents, stating that they were neither attested nor legible. The Department's investigation included statements from the appellants' Director, which failed to explain the repeated use of the same challan for multiple consignments.3. Admissibility and Reliability of Attested Photo Copies of ST-39 Forms:The appellants argued that the attested photo copies of ST-39 forms were inadmissible and unreliable as evidence. They cited various legal precedents to support their claim that unauthenticated documents could not be relied upon. The Department countered by referencing Section 36B(1)(b) of the Central Excise Act, which allows facsimile copies of documents to be admissible in proceedings without the original. The Tribunal upheld the admissibility of the attested photo copies, stating that the provisions of Section 36B were satisfied.4. Violation of Principles of Natural Justice:The appellants claimed a violation of natural justice as they were denied access to the original ST-39 forms. The Tribunal found that the appellants were given adequate opportunity to inspect the documents and that the Department's reliance on attested photo copies did not violate natural justice principles. The Tribunal also noted that the appellants' inability to inspect the original documents did not invalidate the Department's findings.5. Explanation for Excess Stock of MS Ingots Found During Inspection:During an inspection on 15-7-1992, Central Excise Officers found an excess quantity of 6.950 MT of MS Ingots in the appellants' factory, which was not recorded in the RG 1 Register. The appellants explained that the production for 14-7-1992 had not yet been entered in the register. The Tribunal found this explanation insufficient and upheld the Commissioner's order of confiscation and the option to redeem the goods on payment of a fine.Conclusion:The Tribunal upheld the impugned order, confirming the duty demand, penalty, and redemption fine. The appellants' arguments regarding the inadmissibility of ST-39 forms and violation of natural justice were rejected. The Tribunal found sufficient evidence of clandestine removal and improper record-keeping, leading to the dismissal of the appeal.