2005 (7) TMI 535 - AT - Central Excise

Summary

Issues:
- Duty demand on finished goods
- Duty demand on inputs found short
- Illicit clearance of rigid PVC pipes
- Confiscation of inputs/raw materials and finished products
- Confiscation of land/building/plant/machinery
- Penalty on manufacturing units and General Manager

Duty Demand on Finished Goods:
The judgment upholds the duty demand on finished goods found short during stock verification. The argument that stock discrepancies were due to goods stored in different premises was rejected. The comparative charts provided did not fully support the claim of offsetting shortages. Hence, the demand on finished goods found short was sustained.

Duty Demand on Inputs Found Short:
The duty demand on inputs found short was upheld as the appellants admitted the shortage. The contention that loose PVC resins were not accounted for in the shortage calculation was dismissed. The authorities correctly held that loose goods should match the packed condition in the raw material account. The absence of specific demand in the notice was not a valid defense as the appellants had already debited the amounts.

Illicit Clearance of Rigid PVC Pipes:
The judgment affirms the finding of illicit clearance of rigid PVC pipes based on admissions and documentary evidence. The General Manager admitted to the illicit removal and debited the duty promptly. The Commissioner relied on internal records and production reports to establish clandestine production and clearance. The retraction attempt was deemed belated and unconvincing. The argument about insufficient raw material and electricity consumption was refuted based on detailed production records.

Confiscation of Inputs and Finished Products:
Confiscation of inputs/raw materials and finished products was set aside following a precedent that confiscation requires evidence of intent to evade duty. The judgment distinguished between provisions under Rule 173Q(1) for confiscation, leading to the decision to annul the confiscation of goods and property.

Penalty on Manufacturing Units and General Manager:
The penalty on both manufacturing units was upheld due to upheld duty demands and illicit clearances. However, considering the circumstances, the penalties were reduced. The penalty on the General Manager was also reduced. The duty demands were upheld, confiscations annulled, penalties reduced, and the appeals partly allowed.

This detailed analysis of the judgment covers the duty demands, illicit clearances, confiscations, and penalties imposed on the manufacturing units and the General Manager, providing a comprehensive understanding of the legal issues and outcomes involved in the case.