2001 (6) TMI 640 - AT - Central Excise

Summary

Issues:
- Confirmation of demand of duty and personal penalty for clandestine manufacture and removal of final product.

Analysis:
The case involved an appeal against the confirmation of a duty demand and imposition of personal penalty on the appellants for alleged clandestine manufacture and removal of final products. The appellants, engaged in the manufacture of wood products, were visited by Central Excise Officers based on an intelligence report. The officers found discrepancies in the RG-I register, private records, and physical stock of finished goods during their visit. Statements from company personnel and buyers were recorded during the investigation.

The show cause notice alleged clandestine removal of goods without payment of duty, leading to a demand of Rs. 1,63,556.54. The Additional Commissioner confirmed the duty demand, penalty, and interest, which was upheld by the Commissioner (Appeals), prompting the present appeal. The appellate tribunal considered the evidence, including private records and statements, supporting clandestine removal. The authorities found discrepancies between private records and official registers, indicating underreporting of production and clearance.

The appellants argued that the case relied on inaccurate private records reflecting planned production. However, the tribunal noted contradictions in the appellants' statements and lack of effort to disprove the entries in the private records. The tribunal emphasized that the burden of proof shifted to the appellants to show the records were incorrect, especially when corroborated by buyer statements. The tribunal upheld the duty demand confirmation but reduced the personal penalty from Rs. 1,63,556.54 to Rs. 75,000.00 due to the circumstances of the case. The appeal was mostly rejected, with a modification in the penalty amount. The stay petition was also disposed of in the judgment.