2006 (9) TMI 308 - AT - Central Excise

Summary

Issues:
1. Stay application against demand confirmation.
2. Remission application not decided before demand confirmation.

Analysis:
1. The stay application was filed against the confirmation of demand amounting to Rs. 1,25,710 due to a shortage of finished goods in the factory after a burglary. The appellant had filed an FIR, and the Range officers verified the shortage, leading to the demand confirmation. The appellant sought permission for non-reversal of excise duty on the burgled stock, but a show cause notice was issued demanding the duty. The adjudicating authority and Commissioner (Appeals) upheld the demand.

2. The appellant argued that the remission application was not decided before issuing the show cause notice, emphasizing that the matter should have been remanded back for the remission application to be considered first. The appellant had submitted documents like the FIR and insurance surveyor's report to the authorities. The Department contended that the remission application lacked details, and without its grant, the demand confirmation was justified.

3. The Tribunal noted the undisputed burglary and shortage of finished goods, with the FIR indicating an ongoing investigation. It was observed that the remission application remained undecided by the lower authorities. The Tribunal found fault with the lower authorities for adjudicating the demand without first deciding on the remission application, emphasizing the need for procedural correctness.

4. Consequently, the Tribunal set aside the impugned order upholding the demand confirmation and remanded the matter to the original adjudicating authority. The direction was given to decide on the remission application before proceeding with the adjudication of the show cause notice. The appellant was instructed to provide complete details of the goods found short in the factory to aid in the remission application's disposal. The appeal was allowed by way of remand for procedural rectification.