2000 (11) TMI 845 - AT - Central Excise

Duty liability requires concrete proof. Allegations must match notice scope. Appeals allowed with benefits.

MOHD. YAKUB MULLA Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III

The Tribunal found the duty demands unsubstantiated due to lack of evidence supporting the allegations made in the show cause notice. The judgment ... Demand - Exemption - Value of clearances Issues:1. Duty demand based on goods cleared without payment of duty.2. Allegation of clearing articles without payment of duty.3. Allegation of splitting a contract for duty evasion.4. Clubbing of clearances of multiple units for duty calculation.Analysis:Issue 1:The show cause notice demanded duty for goods cleared without payment and without proper documentation. The notice referenced a statement by Shri Mulla, but lacked specific details to support the charge. The statement indicated that M/s. Mulla Fabricators were engaged in specific activities that did not align with the duty demand. The Tribunal found the demand unsustainable due to lack of evidence.Issue 2:Another allegation was that articles were cleared without payment of duty, but this claim lacked supporting evidence. The show cause notice did not provide substantial proof or cite relevant statements to substantiate the charge. The Tribunal emphasized that for duty to be imposed, it must be proven that the repairs amounted to the manufacture of dutiable goods, which was not established in this case.Issue 3:The third allegation involved splitting a contract to evade duty payment. The authorities claimed that bonding activities were conducted without duty payment, but failed to demonstrate that this resulted in the manufacture of separate dutiable goods. The Tribunal highlighted the necessity of proving such activities led to the production of dutiable items, which was not fulfilled in this instance.Issue 4:Regarding the clubbing of clearances from multiple units, the Tribunal noted that while there was evidence of common management by Shri Mulla, there was no specific allegation to combine clearances for duty calculation purposes. The Commissioner's attempt to link the units based on shared management went beyond the scope of the show cause notice. The Tribunal concluded that the demands lacked substantiation and subsequently allowed the appeals with consequential benefits, including setting aside orders of confiscation and penalty imposition.In summary, the Tribunal found the duty demands unsubstantiated due to lack of evidence supporting the allegations made in the show cause notice. The judgment emphasized the importance of providing concrete proof to establish duty liability and highlighted the necessity of specific allegations within the scope of the notice for imposing duties or penalties.