2002 (1) TMI 340 - AT - Central Excise

Summary

Issues:
1. Appeal against duty demand and penalties imposed by the Commissioner (Appeals).
2. Waiver of pre-deposit of duty and penalty amounts pending appeal.

Analysis:
1. The appeal was filed against an order confirming a duty demand of Rs. 8,23,110 on Khandsari molasses and imposing penalties under Section 11AC of the Central Excise Act and Rule 173Q of the Central Excise Rules, 1944. The Department alleged clandestine receipt of molasses by the applicants, leading to the duty demand and penalties. The applicants contended that the evidence relied upon by the Department was insufficient, as it was based on statements from only one transporter, and no discrepancies were found in their records. They argued for a strong prima facie case on merits and claimed the demand was time-barred. The lower authorities upheld the decision, but the Tribunal found the basis of the demand doubtful, given the lack of evidence from other transporters or manufacturers. The Tribunal observed a violation of natural justice in denying the cross-examination of the transporter and granted a complete waiver of pre-deposit of duty and penalties, noting a strong prima facie case in favor of the applicants.

2. The applicants requested a waiver of pre-deposit of the duty and penalty amounts pending the appeal. The Tribunal, after examining the submissions and finding no discrepancies in the applicants' records, noted that the entire case was based on evidence from one transporter. Considering the lack of enquiry with other suppliers and the violation of natural justice in denying cross-examination, the Tribunal granted the waiver, citing doubt in the basis of the demand. It also acknowledged the plea of limitation and lack of material findings supporting the penalties. The Tribunal allowed the application for waiver, stayed the recovery of amounts, and scheduled the appeal for regular hearing on a specified date.