2006 (2) TMI 458 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods and imposition of redemption fine.
2. Imposition of penalty on the appellant company.
3. Allegations of clandestine removal of goods to evade duty.
4. Discrepancies in the investigation and evidence presented.

Confiscation of Goods and Imposition of Redemption Fine:
The appeal challenged an order confiscating goods valued at Rs. 6,95,912.16 and imposing a redemption fine of Rs. 5,99,924.29, along with a penalty of Rs. 1.00 lakh on the appellant company. The Commissioner (Appeals) upheld this decision. However, the Tribunal found discrepancies in the investigation process. Despite provisional release of goods, the redemption fine was imposed, which the Tribunal deemed incorrect. Ultimately, the Tribunal set aside the Commissioner's order and allowed the appeal.

Imposition of Penalty on the Appellant Company:
The appellant company was penalized Rs. 1.00 lakh by the lower authority. The company contested this penalty, arguing that no evidence proved clandestine removal of goods to evade duty. The Tribunal noted that the Department failed to discharge its obligation to demonstrate such removal. As a result, the Tribunal found no basis for imposing the penalty on the appellant company and set aside the penalty.

Allegations of Clandestine Removal of Goods to Evade Duty:
The case involved allegations of clandestine removal of goods without following statutory provisions to evade duty payment. The Commissioner (Appeals) supported these allegations, citing non-production of duplicate invoices and lack of entries in the RG-I register. However, the Tribunal found the evidence insufficient to prove clandestine removal. The Tribunal highlighted discrepancies in the Department's case and concluded that no evidence supported the allegations of evasion. Consequently, the Tribunal rejected the Commissioner's findings.

Discrepancies in the Investigation and Evidence Presented:
The Tribunal scrutinized the investigation process and evidence presented by both parties. It noted inconsistencies in the Department's case, such as the discovery of duplicate invoices in the driver's cabin by Central Excise Officers themselves. The Tribunal found the theory of clandestine removal illogical, especially when the truck was under the Officers' control. Additionally, discrepancies in the stock-taking process and lack of evidence of wrongdoing led the Tribunal to question the Commissioner's conclusions. Ultimately, the Tribunal set aside the Commissioner's order due to insufficient evidence supporting the allegations.