2003 (8) TMI 435 - AT - Central Excise

Summary

Issues Involved:
Whether duty of excise is chargeable for cement due to shortage of plastic bags.

Analysis:
In the appeal by M/s. Sitara Cement (Pvt.) Limited, the primary issue is the demand for excise duty and penalty imposition based on the alleged deliberate non-accounting of 92,000 empty bags received from suppliers. The Appellant's argument revolves around the lack of direct evidence supporting clandestine removal of cement, emphasizing the absence of shortages in raw materials crucial for proving such allegations. They assert that assumptions about the missing bags are unfounded and that the duty and penalty should not be imposed.

The Respondent, represented by Shri D.N. Choudhary, counters by relying on documents collected from transport operators and suppliers, including private records indicating unaccounted goods supplied by the Appellants. The Respondent highlights the Appellants' admission regarding the removal of cement in unaccounted bags, as evidenced in their reply. The reliance on precedents emphasizing the possibility of clandestine removal despite the absence of direct evidence is also crucial to the Respondent's argument.

Upon considering both sides' submissions, the Tribunal notes that out of the 92,000 empty cement bags unaccounted for, the Appellants failed to explain the absence of 14,500 bags. The Tribunal emphasizes the Appellants' admission in their reply, restricting the demand to these 14,500 bags. The lack of cross-examination requests for bag suppliers and detailed evidence presented in the show cause notice support the conclusion that the Appellants failed to account for the bags to enable clandestine cement removal. The Tribunal upholds the duty demand, noting discrepancies in the consideration of certain bag invoices but affirming the overall penalty imposition. The penalty amount is reduced from Rs. 5 lakhs to Rs. 2.50 lakhs for the interests of justice.

In conclusion, the Tribunal rules in favor of the Respondent, upholding the duty demand and imposing a reduced penalty on M/s. Sitara Cement (Pvt.) Limited for their failure to account for empty cement bags, facilitating the alleged clandestine removal of cement without payment of duty.