2005 (10) TMI 379 - AT - Central Excise

Summary

Issues Involved:
1. Confirmation of demand and penalty.
2. Ignorance of relevant evidence and reliance on irrelevant material.
3. Material evidence for suppression of production.
4. Perversity of the Tribunal's finding on suppression of production.

Issue-wise Detailed Analysis:

1. Confirmation of Demand and Penalty:
The Tribunal confirmed the demand of Rs. 1,47,00,127/- and reduced the penalty from Rs. 1,50,00,000/- to Rs. 75,00,000/-. The demand was based on the scrutiny of the balance sheet for 1993-94, which revealed discrepancies between the production figures in the plant performance report and the statutory Central Excise records (RG1). The Tribunal found that the production recorded in RG1 was lower than the actual production, leading to the conclusion that 5297.343 MTs of finished goods were suppressed.

2. Ignorance of Relevant Evidence and Reliance on Irrelevant Material:
The applicant contended that the Tribunal ignored relevant evidence and relied on irrelevant material, including a non-existent statement by Shri Ramchandran. The Tribunal, however, based its decision on various statements and documents, including those from the typist Shri More and Engineer Shri Mapare, who confirmed the accuracy of the figures in the plant performance report. The Tribunal acknowledged the error regarding Shri Ramchandran's statement but maintained that this did not materially affect the overall conclusion.

3. Material Evidence for Suppression of Production:
The Tribunal's conclusion of suppressed production was supported by the plant performance report, which showed higher production figures than those recorded in RG1. The Tribunal relied on the statements of company personnel and the comparison of internal documents to statutory records. The Commissioner rejected the reconciliation statement provided by the appellants, which included waste and scrap figures, as misleading. The Tribunal upheld the Commissioner's findings as they were based on satisfactory evidence.

4. Perversity of the Tribunal's Finding on Suppression of Production:
The applicant argued that the Tribunal's finding of suppression was perverse, citing case law to support the claim that improper appreciation of evidence raises a question of law. The Tribunal, however, held that its conclusions were based on a holistic view of the evidence. The Supreme Court's precedent in Sir Shadilal Sugar and General Mills Ltd. and other cases was cited to emphasize that mere misappreciation of evidence does not constitute a question of law unless it amounts to non-appreciation.

Conclusion:
The Tribunal concluded that the impugned order did not qualify as perverse or irrationally possible based on the material presented. The findings were not solely based on the non-existent statement of Shri Ramchandran but on a comprehensive assessment of evidence. Thus, the Tribunal rejected the reference application, stating that no question of law arose from its order, which was grounded in the appreciation of facts and evidence.