2004 (3) TMI 649 - AT - Central Excise

Summary

Issues:
1. Charges of clandestine removal and duty evasion against a manufacturer.
2. Recovery of a duplicate invoice indicating removal of diesel oil engines.
3. Non-accounted engines in the statutory records.
4. Non-accountal of certain raw materials in the prescribed register.

Analysis:

1. The judgment involved three appeals against a common order concerning charges of clandestine removal and duty evasion against a manufacturer. The appellant faced demands of duty and penalties, with confiscation of goods. The Commissioner (Appeals) set aside the confiscation of land and building but confirmed the rest of the order. The Tribunal considered all appeals together due to the common issues.

2. The first major issue revolved around the recovery of a duplicate invoice indicating the removal of diesel oil engines. The discrepancy in details between the recovered duplicate invoice and statutory records led to a dispute. The Tribunal examined the evidence, including discrepancies in transportation details, and concluded that the engines were clandestinely removed without duty payment, upholding the demand for duty.

3. Another issue concerned non-accounted engines in the statutory records. The appellant argued that the engines were present in the factory and should not be confiscated. However, the Tribunal found that since 30 engines were already removed clandestinely without proper records, the non-accounting of the remaining 19 engines justified their confiscation. The Tribunal upheld the confiscation of the 19 engines due to the potential for duty evasion.

4. The final issue related to the non-accountal of certain raw materials in the prescribed register. The department alleged discrepancies in raw material accounting, leading to confiscation. However, the appellant cited a trade notice specifying principal raw materials and argued against confiscation. The Tribunal ruled in favor of the appellant, setting aside the order confiscating raw materials as there was no provision for confiscation without Modvat credit.

In conclusion, the Tribunal upheld the confiscation of 19 diesel engines but reduced the redemption fine. It set aside the order confiscating raw materials and confirmed the duty demand with reduced penalties. The penalties imposed on the appellants were also reduced accordingly. The judgment partially allowed the appeals, modifying the lower authorities' orders based on the detailed analysis of each issue.