2005 (8) TMI 592 - AT - Central Excise

Summary

Issues: Duty demand and penalty confirmation against the company and its director for alleged evasion by clearing goods in the guise of exempted product.

In the judgment delivered by the Appellate Tribunal CESTAT, New Delhi, the case involved two appeals filed by a company and its director against the confirmation of duty amounting to Rs. 57,45,425/- along with penalties. The company, engaged in manufacturing commercial plywood, block board, flush doors, and panel doors, faced duty demand due to alleged clearance of goods in the guise of panel doors during the period of dispute from 1995-96 to 1998-99. The revenue relied on statements from traders and raw material suppliers to support its claim. The adjudicating authority concluded that the company did not clear panel doors but commercial ply, block boards, and flush doors based on the evidence presented.

The Tribunal analyzed the evidence and found discrepancies in the revenue's argument. Despite invoices describing goods as panel doors, the company's manufacturing process involving plywood from core veneers was deemed legitimate. The Tribunal highlighted that non-payment of duty on plywood, used in panel door production under SSI exemption, did not imply non-manufacture of panel doors. The Tribunal also noted that the company had cleared panel doors to a significant number of traders, indicating actual production. The statements of traders lacked legal value due to lack of verification and corroboration, weakening the revenue's case.

Regarding the raw material suppliers, their admissions of supplying core veneers did not conclusively prove the revenue's allegations. The absence of panel doors during an officer's visit was insufficient evidence considering the substantial clearances made by the company. The Tribunal emphasized that charges of clandestine removal must be substantiated with tangible evidence, which the revenue failed to provide. Consequently, the impugned order was set aside, and the appeals of the appellants were allowed with consequential relief as per law. The judgment was dictated and pronounced on 22-8-2005 by the Tribunal.