2002 (2) TMI 995 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand of duty and penalty by the Commissioner of Central Excise.
2. Allegation of misdeclaring dutiable products as exempt products.
3. Lack of opportunity for cross-examination of witnesses by the Department.
4. Time-barred demand of duty.
5. Financial hardship claimed by the appellants.
6. Decision on waiver of predeposit of duty and penalty.

Analysis:

1. The appellants challenged the Order confirming the demand of duty and penalty imposed by the Commissioner of Central Excise. The Department alleged that dutiable products were misdeclared as exempt, leading to the demand. The appellants argued that the Department's case was solely based on misdeclaration, emphasizing that they maintained proper records in the RG-1 register. They contended that the Department's evidence, primarily statements from customers, was unreliable as cross-examination of these witnesses was not allowed. The appellants also raised the issue of time-barring the demand, citing a Tribunal decision to support their argument.

2. The Department opposed the appellants' request for waiver of predeposit, asserting that scrutiny of documents showed misdeclaration of dutiable items. The Department argued that the closure of the factory did not affect the appellants' financial capability to pay the duty and penalty. They insisted that the appellants should deposit the entire amount due.

3. The Tribunal considered both parties' submissions and noted the statements of witnesses alleging misdeclaration by the appellants. However, the lack of cross-examination raised doubts about the reliability of this evidence. Despite the financial hardship claimed by the appellants, the Tribunal observed that they had a successful business before 1999, suggesting they had sufficient funds. Nevertheless, considering the circumstances, the Tribunal directed the appellants to deposit a specific amount as a predeposit by a specified date, treating it as a predeposit for the stay petitions filed.

4. The Tribunal ordered that upon compliance with the deposit directive, the predeposit of the remaining duty and penalty would be waived, and recovery stayed during the appeal process. However, failure to comply would lead to the vacation of the stay and dismissal of the appeals without further notice. The Tribunal scheduled a compliance report for a specified date to monitor adherence to the directives.