2003 (2) TMI 253 - AT - Central Excise

Summary

Issues:
1. Duty evasion on clearances of Cut-Tobacco and packaging material.
2. Submission of incorrect information on Form XXV-A.
3. Allegations of duty evasion and lack of proper documentation.
4. Cross-examination of drivers not allowed.
5. Liability for duty under Notification No. 356/86-C.E.

Analysis:
1. The case involved appeals against an order passed by the Commissioner of Central Excise regarding duty evasion on clearances of Cut-Tobacco and packaging material. The appellants, a manufacturing company, were found to have dispatched goods to a franchised unit, but discrepancies were noted in the documentation. The Revenue issued a show cause notice based on Form XXV-A, alleging duty evasion, leading to penalties imposed on the appellants.

2. The appellants contended that the goods were dispatched as per their records, including Cut-Tobacco and packaging material. They argued that the truck drivers incorrectly filled Form XXV-A at the Sales Tax barrier, mentioning only Cut-Tobacco to avoid paying duty on packaging material. They claimed the drivers acted independently without their knowledge and that the goods were received by the franchised unit as per records.

3. The Revenue's stance was that the Forms were signed by the appellants' officer, clearly indicating the consignment as only Cut-Tobacco, which was accepted by Sales Tax Authorities. They argued that duty evasion was not limited to the appellants but extended to the manufacturing unit using the tobacco in cigarettes without proper duty payment.

4. The Tribunal noted that the appellants admitted the submission of Form XXV-A by their drivers but disputed the contents. It was found that the appellants did not rectify the incorrect information submitted by their drivers, leading to duty evasion. The denial of cross-examination of drivers was addressed, stating that the Forms were prepared by the appellants' officer, not the drivers, as claimed.

5. Additionally, the appellants argued for liability under a specific notification for reduced duty, claiming the Cut-Tobacco was used in cigarette manufacturing. However, the Tribunal found discrepancies in the usage and receipt of Cut-Tobacco by the manufacturing unit, leading to a lack of proof for duty entitlement under the notification.

In conclusion, the Tribunal rejected the appeals, finding no merit in the appellants' arguments and upholding the duty imposition based on the discrepancies in documentation and evasion attempts highlighted during the proceedings.