2005 (11) TMI 393 - AT - Central Excise

Summary

Issues involved:
Demand of duty on alleged clandestine removal by the appellants.

Analysis:
The case revolves around the demand of duty on alleged clandestine removal by the appellants. The Officers of the Department visited the appellants and concluded that duty payable goods were removed without payment of duty. A show cause notice was served, leading to proceedings dropped by the adjudicating authority due to lack of corroborative evidence. The Revenue appealed to the Commissioner (Appeals), who allowed the appeal. The appellants contested this decision, arguing that the Department failed to provide clinching evidence of clandestine removal. They highlighted their eligibility for Modvat credit on purchased inputs, supported by a letter certifying the duty paid nature of inputs. The Department contended that proper declarations for SSI status and Modvat credit were not filed, and pointed to the Director's statement on maintaining two sets of invoices.

Upon reviewing the submissions and records, it was observed that the charge of clandestine removal was based on factors like high scrap generation, fictitious sales, and the Director's statement. However, there was a lack of corroborative evidence to support these allegations. Despite this, it was noted that even in cases of clandestine removal, appellants eligible for Modvat credit could avail it post the Department's notice. In this instance, the appellants were confirmed to have Modvat credit amounting to Rs. 16 lakhs, supported by Revenue Authorities at the suppliers' end. Consequently, a prima facie case for waiving the pre-deposit of duty was established. As a result, the application for stay was granted, and the recovery of duty was stayed pending the appeal's disposal.