1998 (10) TMI 471 - AT - Central Excise

Clandestine removal - Evidence - Preponderance of probability - Penalty - Confiscation - Accounts and records - Duty liability - Demand - Exemption

Summary

Issues Involved:
1. Duty demand on 6270.825 kgs of Super Enamelled Copper wire.
2. Confiscation of 12 reels of Super Enamelled Copper wire.
3. Evidence of illicit removal and storage of goods.
4. Non-accountal of goods in RG I register.
5. Imposition of penalty.

Detailed Analysis:

1. Duty Demand on 6270.825 kgs of Super Enamelled Copper Wire:
The Revenue appealed against the order of the Additional Collector of Central Excise, Ahmedabad, which dropped the duty demand of Rs. 4,24,419.42 on 6270.825 kgs of Super Enamelled Copper wire. The Department alleged that the respondents manufactured and cleared these goods without payment of duty. However, the Additional Collector found no conclusive evidence that the respondents manufactured the wires found in the premises of M/s. Shashi Insulating Wires Co. or that they removed these goods illicitly. The Managing Director's statement, which was retracted, lacked corroboration. The Tribunal upheld the Additional Collector's findings, noting the absence of convincing reasons to interfere with the decision.

2. Confiscation of 12 Reels of Super Enamelled Copper Wire:
The respondents filed a cross-objection against the confiscation of 12 reels of Super Enamelled Copper wire weighing 344.205 kgs, which were found unaccounted in the RG I register. The Tribunal confirmed the order of confiscation, rejecting the respondents' argument that the wires had not reached the RG I stage. The goods were found fully manufactured, packed, and ready for dispatch, thus establishing the charge of non-accountal.

3. Evidence of Illicit Removal and Storage of Goods:
The Department's case included the recovery of six reels of Super Enamelled Copper wire from M/s. A.B. Industries, Vadodara, and evidence suggesting the respondents cleared 5727.330 kgs without payment of duty. The Additional Collector noted that M/s. A.B. Industries placed orders and made payments to M/s. Shashi Insulating Wires, not the respondents. The Tribunal found no evidence of actual manufacture by the respondents and upheld the benefit of doubt extended by the Adjudicating authority.

4. Non-accountal of Goods in RG I Register:
The Tribunal confirmed the charge of non-accountal of 12 reels of Super Enamelled Copper wire, which were found in a fully manufactured state and ready for dispatch. The respondents' argument that the goods had not reached the RG I stage was not accepted.

5. Imposition of Penalty:
The Vice President disagreed with the lenient view of the Additional Collector regarding the penalty. He emphasized that the established facts required the respondents to account for the goods in the RG I register and that the non-accountal was not merely a technical error. The Vice President also noted that the Managing Director's admission and the presence of goods with the respondents' labels in the premises of M/s. Shashi Insulating Wires and a customer indicated a preponderance of probability in favor of the Department's case. He argued for a more serious view and remanded the matter for reconsideration.

Separate Judgments:
The Vice President's order differed from the Member (Judicial), leading to a reference to a Third Member. The Third Member agreed with the Vice President's order to set aside the impugned order and remand the matter for reconsideration. Consequently, the majority opinion led to the final order remanding the case for further consideration in light of the Vice President's observations and findings.