2006 (3) TMI 521 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty and penalty based on alleged clandestine manufacturing and clearance of goods.

Analysis:
1. The Applicants sought waiver of pre-deposit of Rs. 3,20,692/- and penalty of equal amount due to a confirmed demand for manufacturing and clearing goods without duty payment. The demand was made as the goods cleared exceeded the limit under the small scale exemption notification, resulting in a duty demand of Rs. 3,13,810/- along with an equal penalty.

2. The contention of the Applicants was that there was no evidence to prove clandestine manufacturing and clearance of goods. They argued that a statement from the partner of the firm, admitting to manufacturing approximately 6 MT per day, was insufficient evidence. Additionally, slips from Dharmkanta showing weighment of scrap were inconclusive as the owner's statement did not link the scrap to the Applicants.

3. On the other hand, the Revenue contended that as the Applicants were operating under S.S.I and not maintaining records, the partner's statement admitting to manufacturing 6 MT per day was sufficient grounds for the demand. The Revenue believed that the demand was justified based on this statement.

4. The Tribunal noted that the demand was solely based on the partner's statement indicating an approximate daily manufacturing quantity of 6 MT. Considering this, the Tribunal found that the Applicants had a strong case for waiver of duty and penalty. Consequently, the stay applications were allowed unconditionally, indicating a favorable decision for the Applicants regarding the waiver of pre-deposit of duty and penalty.