2007 (3) TMI 430 - AT - Central Excise

Issues:
1. Appeal against the Order passed by Commissioner (Appeals) - Revenue and assessee.
2. Revenue's grievance on duty amount held as time-barred.
3. Assessee's grievance on duty demand, penalty, and interest.
4. Evaluation of evidence by Revenue and Commissioner (Appeals).
5. Appellant deprived of opportunity for rebuttal.
6. Stock verification results and seized documents.
7. Lack of nexus in documents provided by the Revenue.
8. Deficiency of stock and lack of proper appraisal by Revenue.
9. Failure to follow due process of law and fair trial.
10. Burden of proof on Revenue for allegation of clandestine removal.

Analysis:
1. Both Revenue and the assessee filed appeals against the Order passed by the Commissioner (Appeals). Revenue's Appeal was registered as ESM-270/05, and the Appellant's Cross Appeal was registered as ESM-276/05.

2. Revenue contended that the duty amount of Rs. 1,27,635 held as time-barred by the Commissioner (Appeals) was erroneous. The adjudication order was defended by Revenue, emphasizing the evidence on record and the alleged evasion. The Revenue cited a relevant decision to support its argument.

3. The assessee argued against the duty demand of Rs. 3,38,035 and the penalty imposed, claiming they were unjustified. The assessee highlighted the lack of basis for the demand and penalty. The issue of interest collection was also raised by the assessee.

4. The evaluation of evidence by both Revenue and the Commissioner (Appeals) was scrutinized. The Commissioner's decision to hold the duty demand as time-barred was a point of contention between the parties.

5. The Appellant was allegedly deprived of the opportunity for rebuttal as crucial documents were provided after a Tribunal directive. This deprivation was seen as a violation of due process of justice.

6. The stock verification conducted at the assessee's premises revealed a shortage of goods. Seized documents, particularly document No. 13, formed the basis of the demand. However, the documents provided did not have employee signatures or clear correlation, raising doubts about their validity.

7. Lack of nexus in the documents provided by Revenue was emphasized. The absence of a clear link between the documents and the alleged shortage raised concerns about the validity of the demand.

8. Despite the deficiency of stock, Revenue failed to conduct a proper appraisal of the 294 pages of seized documents. The lack of a thorough examination and the absence of a speaking order were highlighted.

9. The judgment criticized the failure to follow due process of law and ensure a fair trial. The importance of providing copies of all documents used against the Appellant for a fair defense was underscored.

10. The burden of proof for the allegation of clandestine removal was emphasized to be on Revenue. The judgment concluded that the Revenue did not discharge this burden satisfactorily, leading to the dismissal of Revenue's appeal and the allowance of the assessee's appeal for the sake of justice.

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