2005 (1) TMI 532 - AT - Central Excise

Issues:
1. Duty-demand on Aerated Waters/Flavours cleared clandestinely without payment of duty under forged invoices.
2. Imposition of penalty equivalent to the duty-demand.
3. Allegation of clandestine clearance of goods without payment of duty.
4. Confirmation of duty-demand by the Commissioner of Central Excise.
5. Appeal against the duty-demand and penalty imposed.

Analysis:

1. Duty-demand and Penalty:
The case involved a duty-demand of Rs. 27,67,551.00 on Aerated Waters/Flavours cleared clandestinely without payment of duty using forged invoices. The Commissioner confirmed the duty-demand and imposed a penalty of an equivalent amount. The appellant company challenged this decision, arguing that they were not directly notified about the duty recovery on goods cleared under fake invoices. However, the Department contended that the show cause notice clearly accused the appellant of clandestine clearances supported by statements and records. The Tribunal upheld the duty-demand but reduced the penalty to Rs. 5.00 lakh considering the circumstances.

2. Allegation of Clandestine Clearance:
The appellant company was accused of clandestine clearance of goods without paying duty to various customers under fake invoices. The adjudicating authority upheld the demand of duty due to excess clearances, even though the allegation regarding Concentrate purchase for clandestine activities was dropped. The appellant did not dispute the excess clearances, leading to the confirmation of duty-demand and penalty. The Tribunal found the charge of clandestine clearance well-supported by evidence and statements, hence upholding the duty-demand.

3. Confirmation of Duty-demand:
The Tribunal analyzed the show cause notice and the evidence on record to determine the validity of confirming the duty-demand. It was established that the appellant company had opportunities to contest the charges but failed to do so effectively. The statements of customers and records clearly indicated clandestine clearances under fake invoices. Therefore, the Tribunal found no error in confirming the duty-demand based on the evidence presented.

4. Reduction of Penalty:
While upholding the duty-demand, the Tribunal considered the circumstances and reduced the penalty imposed to Rs. 5.00 lakh from the original amount. This reduction was deemed appropriate given the overall facts and context of the case. The appeal was partly allowed on this basis, and the Cross Objection filed by the Revenue was also addressed and disposed of accordingly.

In conclusion, the Tribunal upheld the duty-demand on clandestine clearances of Aerated Waters/Flavours supported by forged invoices, while reducing the penalty imposed on the appellant company. The decision was based on the evidence, statements, and opportunities provided during the proceedings, ensuring a fair and just outcome in the case.

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