2002 (12) TMI 466 - AT - Central Excise

Summary

Issues:
- Duty demand and penalty imposed on the appellant

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a duty demand of approximately Rs. 3.5 lakhs and a penalty of Rs. 5,000 imposed on M/s. Jindal Strips Limited. The Central Excise Officers observed that the appellant had disposed of various items during a specific period, which the appellant claimed arose from dismantling old machinery purchased by them. The Commissioner accepted the explanation for certain items but not for the remaining goods, stating that the appellant failed to provide documentary evidence establishing the origin of these goods. The Commissioner concluded that the appellant had manufactured excisable goods without paying central excise duty. In response, the appellant argued that they were manufacturers of specific items and the goods in question were a result of dismantling old machinery, not subject to central excise duty as they were not manufactured but obtained through dismantling.

Upon reviewing the records and submissions, the Tribunal found that the allegation of clandestine manufacturing and removal of goods by the appellant lacked concrete evidence. The appellant's explanation that the items in question arose from dismantled machinery purchased by them was rejected primarily due to the inability to establish a direct correlation between the purchased goods and the goods sold. The Tribunal emphasized that the mere difference in descriptions between purchased and sold goods was insufficient to prove clandestine manufacturing. The Tribunal highlighted that a charge of manufacture requires more substantial and positive evidence, which was lacking in this case. Consequently, the Tribunal allowed the appeal, setting aside the duty demand and penalty imposed on the appellant.

In conclusion, the Tribunal's decision was based on the lack of conclusive evidence supporting the allegation of clandestine manufacturing by the appellant. The Tribunal emphasized the importance of tangible evidence in establishing such charges and ruled in favor of the appellant, overturning the duty demand and penalty imposed by the Commissioner.