2003 (11) TMI 400 - AT - Central Excise

Summary

Issues:
Demand of duty based on unaccounted raw materials usage, imposition of penalty, allegations of clandestine removal, shortage of raw materials, lack of evidence for duty evasion.

Analysis:
The judgment deals with the confirmation of a duty demand amounting to Rs. 4,21,642 on the grounds of unexplained accounts of raw materials leading to their unauthorized use in the production process without duty payment. Additionally, a penalty equal to the duty amount has been imposed on the appellants. The Commissioner initially raised demands for clandestine removal, but later dropped them due to insufficient evidence such as road challans, invoices, sales statements, or cash records. However, the shortage of raw materials was established, indicating their unauthorized use in manufacturing final products.

The consultant for the appellants argued that the visiting officers failed to consider the slitted raw materials present in the factory, leading to an incorrect assessment of raw material shortage. Moreover, it was contended that there was no concrete evidence proving the removal of goods without paying the required duty. The Tribunal acknowledged the validity of these arguments, leading to the unconditional allowance of both Stay Petitions and setting a date for the main appeal.

In conclusion, the Tribunal found merit in the appellants' contentions regarding the assessment of raw material shortage and lack of evidence for duty evasion. As a result, the Stay Petitions were granted, and the main appeal was scheduled for a future date, indicating a favorable outcome for the appellants in challenging the duty demand and penalty imposed on them.