2007 (2) TMI 477 - AT - Central Excise

Summary

Issues:
Detection of excess stock during Central Excise Officers' visit, explanation for excess stock by the respondent, confirmation of duty demand and penalty imposition, appeal allowed by Commissioner (Appeals), admission of excess stock by partner of respondent, evidence submitted by respondent for processing of fabrics, dispute over evidence by Revenue.

Analysis:

The case involved the detection of excess stock of processed fabrics during a visit by Central Excise Officers to the factory of the respondents, who were manufacturers of man-made knitted fabrics. The partner of the respondent, Shri Rajesh Jain, was unable to provide a satisfactory explanation for the excess stock due to his ill health and absence from the factory. The respondent later clarified that the excess stock was a result of fabrics sent to them for washing and stain removal by three parties, supported by photocopies of challans. The adjudicating authority upheld duty demand and imposed a penalty, considering the respondent's explanation an afterthought.

The Commissioner (Appeals) allowed the appeal of the respondents, leading to the Revenue challenging the decision. The Revenue contended that the partner of the respondent had admitted the excess stock, which was not retracted, supporting the adjudicating authority's order. However, upon review, the Tribunal found that the respondent had provided evidence to substantiate the claim that the fabrics were sent for processing, and the Revenue did not contest this evidence. Consequently, the Tribunal dismissed the Revenue's appeal, emphasizing the lack of dispute over the evidence presented by the respondent.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the Revenue's appeal, highlighting the importance of the evidence submitted by the respondent in demonstrating the legitimate processing of fabrics and the absence of any challenge from the Revenue regarding the veracity of the evidence.