2002 (8) TMI 761 - AT - Central Excise

Summary

Issues:
1. Commissioner exceeding the scope of show cause notice in confirming duty demand.
2. Calculation of duty based on milk consumption instead of sugar consumption.
3. Reliability of private register entries for duty calculation.
4. Overlapping duty demands for the same period.
5. Ignoring appellants' entitlement to SSI exemption and specific Act provisions.
6. Imposition of penalties without proper consideration of evidence.

Analysis:
1. The appeals were filed against an Order-in-Original confirming duty demand and imposing penalties on appellants for alleged evasion of Central Excise duty. The Commissioner confirmed duty demand based on milk consumption, deviating from the show cause notice's basis of sugar consumption, which the appellants contested as beyond the notice's scope.

2. The appellants argued that entries in private registers were insufficient to calculate duty without additional reliable evidence. They further contended that demand for a specific period was already included in the overall demand, highlighting an overlap that the Commissioner overlooked.

3. The Commissioner's decision to use milk consumption for duty calculation, not informed to the appellants earlier, was deemed legally unsustainable. The Order was criticized for lacking tangible evidence to support assumptions of clandestine production and removal of goods by the appellants.

4. The appellants' claim for SSI exemption and benefits under specific Act provisions was disregarded without proper discussion, indicating a failure to consider all relevant aspects before confirming duty demand.

5. Penalties imposed on the appellants under Rule 209A were deemed unjust as the Commissioner failed to differentiate between dealers based on their knowledge of the non-duty paid nature of goods. The decision lacked a substantial distinction in penalizing different dealers.

6. The Tribunal concluded that the impugned Order should be set aside, and the case remanded for a fresh decision by the adjudicating authority after hearing the appellants. The appeals were allowed by way of remand, emphasizing the need for a fair and lawful reconsideration of the matter.