2001 (7) TMI 609 - AT - Central Excise

Tribunal rules in favor of appellants in timber logs dispute, citing lack of evidence for duty demand.

BIDESH PLYWOOD LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BOLPUR

BIDESH PLYWOOD LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BOLPUR - 2001 (136) E.L.T. 1361 (Tri. - Kolkata) Issues:1. Dispute over the disposal of imported timber logs.2. Allegations of exceeding exemption limits and clandestine removal.3. Confirmation of duty demand, penalty imposition, and goods confiscation.Analysis:Dispute over the disposal of imported timber logs:The case involved a dispute regarding the disposal of Malaysia Timber Logs imported by the appellants during a specific period. The appellants claimed to have sold the timber logs to various customers from the Port Area without bringing them into the factory premises. On the contrary, the Revenue alleged that the timber logs were used in manufacturing plywood, exceeding the exemption limit. This disagreement led to the issuance of a show-cause notice and subsequent confirmation of a duty demand of Rs. 1,78,774.12 against the appellants, along with a personal penalty of the same amount under Section 11AC. Additionally, plywood valued at Rs. 59,466.17 was confiscated, with an option for redemption on payment of a fine of Rs. 12,000.Allegations of exceeding exemption limits and clandestine removal:The appellants contended that the imported timber logs were legitimately sold to customers with proper documentation, refuting the Revenue's claim of clandestine removal. The appellants argued that the Revenue's conclusions were based on unsubstantiated inquiries and lacked corroborating evidence. The appellants emphasized that the customers mentioned in the invoices were genuine, as evidenced by their commercial dealings in commercial plywood with these parties. The Tribunal noted that mere suspicion without supporting evidence cannot form the basis for allegations of clandestine manufacture and removal. In the absence of concrete evidence, the Tribunal found the Revenue's findings unsustainable and set aside the order confirming duty demand, penalty imposition, and goods confiscation.Confirmation of duty demand, penalty imposition, and goods confiscation:Upon careful consideration of arguments from both sides, the Tribunal found that the Revenue's conclusions regarding the use of logs in plywood manufacture were unfounded. The Tribunal highlighted the lack of an inquiry report provided to the appellants and emphasized the necessity of corroborating evidence for charges of clandestine activities. Noting the absence of such evidence in the case, the Tribunal ruled in favor of the appellants, allowing the appeal and providing consequential relief by setting aside the confirmed duty demand, penalty imposition, and goods confiscation.In conclusion, the Tribunal's decision favored the appellants by refuting the Revenue's allegations of exceeding exemption limits and clandestine removal, highlighting the importance of concrete evidence in such cases and emphasizing the need for a factual basis for allegations of wrongdoing.