2005 (6) TMI 348 - AT - Central Excise

Summary

Issues:
Alleged diversion of Cenvat-availed input to sister concern without payment of duty, authenticity of BIN cards, demand of duty, penalty under Section 11AC, reliance on Tribunal's decision.

Analysis:
The case involved the appellants being accused of diverting Cenvat-availed input to their sister concern without paying duty, based on entries in the BIN cards. The Department issued a show cause notice, alleging clandestine diversion during 2000-01. The appellants contended that the inputs were used in manufacturing, denying the diversion. The Department relied on BIN card entries, claiming authenticity. The demand of duty and penalties were affirmed by lower authorities.

The appellants argued that the BIN cards were created for ISO certification and not reliable for duty assessment. They emphasized the lack of concrete evidence supporting the alleged diversion. Reference was made to a Tribunal decision rejecting similar allegations based solely on private accounts. The Department reiterated the findings, emphasizing the appellants' own records as evidence of diversion to the sister concern.

The judge analyzed the submissions, emphasizing the importance of ISO certification for global trade and consumer trust. The judge rejected the appellants' claim regarding BIN card reliability, citing the international significance of ISO standards. The judge noted the Accounts Officer's statement about the input removal and the lack of contradiction from the sister concern. Consequently, the physical removal of inputs to the sister concern was deemed proven, justifying the duty demand.

Regarding penalties, the judge upheld the penalty under Section 11AC, considering the clandestine activity. However, the separate penalty was deemed unwarranted and set aside. The appeal was ultimately dismissed, with modifications to the penalty amount. The judgment highlighted the significance of maintaining accurate records for compliance and the consequences of failing to discharge the burden of proof in such cases.

This detailed analysis showcases the legal intricacies involved in the case, including the interpretation of evidence, reliance on records, and the application of penalties under relevant provisions.