2006 (3) TMI 394 - AT - Central Excise

Summary

Issues: Stay applications against confirmed demand of duty and penalties under Rule 26 of Central Excise Rules, 2002.

The judgment by the Appellate Tribunal CESTAT, Mumbai involved the disposal of stay applications against a confirmed demand of duty and penalties imposed on the appellant, formerly known as M/s. Indo Green Textiles Pvt. Ltd. The demand was based on records seized from a transporter, M/s. S.P. Thakkar Transport Co., indicating excess transportation of processed fabrics by M/s. Usha Fashions Private Ltd. The Commissioner confirmed the demand citing presumptive evidence and burden of proof principles. The appellant contested that the evidence relied upon was solely from the transporter's records, lacking corroborative evidence such as procurement records, processing details, or buyer information. The appellant argued that reliance on a third party's records without additional proof was insufficient to prove clandestine removal. Additionally, financial hardship was pleaded based on incurred losses, seeking exemption from pre-deposit conditions.

On review, the Tribunal acknowledged the lack of substantial evidence beyond the transporter's records to establish clandestine activities by the appellant. The absence of corroborative evidence, like raw material procurement or processing details, led the Tribunal to agree with the appellant's contention. The Tribunal found the appellant had presented a strong prima facie case, warranting the unconditional allowance of all stay petitions. Consequently, the Tribunal ordered the same, considering the significant revenue involved and prioritized the appeals for expedited final disposal on 24-4-2006.