2005 (10) TMI 331 - AT - Central Excise

Summary

Issues:
1. Allegation of clandestine removal and duty confirmation.
2. Consideration of evidence regarding non-utilization of inputs for manufacturing.
3. Examination of findings in the impugned order for confirming the demand.

Analysis:
1. The appeal stemmed from an Order-in-Original confirming demands based on allegations of clandestine removal, with the Commissioner dropping major demands due to lack of proof of manufacture and removal without duty payment. However, a note in the order mentioned delivery challans and invoices in another company's name, leading to duty confirmation and penalty imposition, which was contested.

2. The appellant contended that inputs received from specific sources were unused and defective, as stated by the Director in the reply to the show cause notice. The appellant argued that the evidence demonstrating non-utilization and the absence of manufacturing to warrant duty confirmation was disregarded, rendering the order unsustainable.

3. The impugned order's findings were reiterated by the learned SDR, but upon careful review, the Tribunal found that the appellant's statements regarding defective inputs, non-entry in registers, and non-utilization for manufacturing were not adequately considered by the Commissioner. The Tribunal emphasized the Director's denial of manufacturing final products from the defective fabric, asserting that the demand confirmation lacked a factual basis and evidentiary support, leading to the appeal's allowance and the impugned order's setting aside. The lack of reliance on evidence by the Commissioner in confirming the demands was a critical factor in the Tribunal's decision.