2004 (6) TMI 567 - AT - Central Excise

Summary

Issues:
- Challenge to Order-in-Original demanding duty and imposing penalties
- Alleged clandestine removal of cotton yarn without valid documents
- Discrepancies in stock and clearance without proper documentation
- Defense against duty demands and penalties
- Legal analysis of demands and penalties by the Appellate Tribunal

The judgment by the Appellate Tribunal CESTAT, CHENNAI involved the challenge against Order-in-Original No. 82/95, where a total duty of Rs. 1,02,804/- was demanded from the appellants under Rule 9(2) read with proviso to Section 11A(1) of the CE Act, 1944. Additionally, penalties were imposed under Rules 173Q and 226 of the CE Rules, 1944, along with the appropriation of a sum towards the provisional release of seized goods. The issues revolved around the alleged clandestine removal of cotton yarn without valid documents, discrepancies in stock, and clearances without proper documentation.

The case involved the interception of a vehicle carrying cotton hosiery yarn belonging to the appellants without valid documentation. Statements were obtained from individuals involved, indicating irregularities in stock and clearances. The appellants contested the duty demand, arguing that duty had been paid, and discrepancies in stock were accounted for. The defense highlighted that all removals were made under proper documentation and no evidence supported the allegations of past clearances without payment of duty.

The Appellate Tribunal analyzed each demand separately. The demand of Rs. 85,543/- for past clearances was set aside due to lack of concrete evidence supporting the allegations of clandestine removal. The demand of Rs. 3,959/- for alleged clearance without payment was remanded for verification of duty payment. The demand of Rs. 13,302/- for unaccounted stock was set aside, considering technical violations and explanations provided by the appellants.

In conclusion, the Appellate Tribunal disposed of the appeal by remanding one aspect for verification, setting aside demands for past clearances and unaccounted stock. The penalties imposed were also set aside. The judgment emphasized the need for concrete evidence to support allegations of clandestine activities and highlighted technical violations in the case.