2005 (2) TMI 659 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty and penalty amount, Stay of recovery, Demand for duty on allegedly cleared goods, Imposition of penalties, Confiscation of seized goods, Violation of principles of natural justice.

The judgment pertains to an application seeking waiver of pre-deposit of duty and penalty amount, as well as a stay on the recovery, following an order by the Commissioner of Central Excise confirming a demand for duty amounting to Rs. 2,86,40,790 in relation to excisable goods allegedly cleared clandestinely between June 1997 and March 2001. Additionally, the order imposed penalties of Rs. 2,12,016 under Section 11AC and Rs. 10,00,000 under 173Q(1) of the Central Excise Rules, 1944, alongside the confiscation of seized goods.

The appellant contended that the reasons for upholding the duty demand were illegal and unsustainable, lacking factual and legal support. It was argued that the evidence in the Show Cause Notice did not establish clandestine removal of goods without duty payment, relying instead on assumptions and presumptions. The appellant cited the case of M/s. Oudh Sugar Mills Ltd. v. Union of India to support their position.

The appellant further explained that although the oil supplies were made in their name by oil companies, the oil was actually used and paid for by third parties, with payment details mentioned on the seized invoices. Moreover, the credibility of records seized from the transporter's premises was questioned.

It was contended that the impugned order violated principles of natural justice by going beyond the scope of the Show Cause Notice. After considering the submissions, the Tribunal found a prima facie case in favor of the appellants, leading to a full waiver of pre-deposit of the duty amount and penalty, with a stay on recovery granted. An early hearing was scheduled for March 14, 2005, as per the order pronounced on February 2, 2005.