2004 (1) TMI 495 - AT - Central Excise

Summary

Issues: Revenue challenge to order-in-appeal setting aside duty demand and penalty for clandestine manufacturing and clearance of goods.

Analysis:
1. Issue: Challenge to the impugned order-in-appeal.
- The Revenue contested the order-in-appeal that reversed the duty demand confirmation and penalty imposition on the respondents for clandestinely manufacturing and clearing goods without duty payment.
- The Commissioner (Appeals) had set aside the duty demand and penalty, citing the existence of an alleged agreement and an invoice as defense by the respondents.

2. Analysis:
- The Revenue argued that the alleged agreement and invoice presented by the respondents were not disclosed to Central Excise officers during their visit to the factory, raising doubts about their authenticity.
- The Commissioner (Appeals) erred in accepting the documents as valid evidence, as the goods in question were found in the factory premises prior to the dates mentioned in the agreement and invoice.

3. Analysis:
- Upon reviewing the case, the Tribunal found that the respondents were engaged in manufacturing Raney Nickel catalyst under Chapter Heading 3815.00 of the CETA.
- During a surprise visit, it was discovered that the respondents were manufacturing MS storage tanks and FRP, wrongly claiming exemption under Notification 67/95, as the products were classifiable under a different heading not eligible for exemption.

4. Analysis:
- The Tribunal rejected the respondents' claim of getting the goods manufactured from another firm, as the agreement and invoice were produced after a significant delay from the visit by Central Excise officers.
- Non-disclosure of the agreement during the initial visit and the timing of document production raised suspicions of fabrication to evade duty payment.

5. Outcome:
- Consequently, the Tribunal set aside the order-in-appeal, allowing the Revenue's appeal and reinstating the duty demand and penalty against the respondents for clandestine manufacturing and clearance of goods without payment of duty.