2004 (8) TMI 593 - AT - Central Excise

Summary

Issues:
- Appeal against Order passed by Commissioner of Central Excise (Appeals), Patna
- Allegations of shortages and defective units of Pepsi Concentrate and Crown Corks
- Admissibility of Modvat credit
- Requirement of evidence for clandestine manufacture and removal

Analysis:
The appeal was filed against the Order passed by the Commissioner of Central Excise (Appeals), Patna, concerning shortages and defective units of Pepsi Concentrate and Crown Corks. The appellant argued that the authorities made assumptions without evidence and that the demand based on shortages of Crown Corks was not sustainable. They emphasized the need for evidence like accounts of other raw materials to establish unaccounted manufacture. The appellant also cited legal precedents to support their case, highlighting the necessity for the Revenue to prove clandestine manufacture and removal beyond doubt. Additionally, the appellant contested the disallowance of Modvat credit without proper justification, asserting that all shortages were reported, leaving no room for suspicion.

In response, the Revenue contended that the appellant failed to produce any accounts or evidence regarding the defective Crown Corks. They supported the Commissioner (Appeals)'s order.

Upon reviewing the records and arguments, the Tribunal found that the demand was solely based on shortages of Crown Corks without substantial evidence of clandestine removal. Citing legal precedents, the Tribunal emphasized that demands cannot be sustained merely on waste or shortages of certain materials. They reiterated that Modvat credit is admissible for damaged or unfit materials during manufacturing. The Tribunal highlighted the necessity of positive evidence to establish clandestine activities, stating that demands cannot be made on presumptions or assumptions alone. Based on these considerations, the Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief to the appellants.