2007 (2) TMI 549 - AT - Central Excise

Summary

Issues involved: The issues involved in the judgment are challenges to the Commissioner's order based on statements made by a partner of a company regarding shortage of raw materials, clearance of goods without payment of duty, and lack of proper accounting.

Summary:

1. The case revolves around detailed statements made by the partner of the company admitting shortage of raw materials and clearance of goods without payment of duty or proper documentation. The first statement acknowledged the shortage and improper clearance of garments, while the second statement provided further details on the nature of waste generated during manufacturing, admitting to a higher shortage than initially calculated.

2. The applicants argued that the second statement retracted the contents of the first statement by showing a higher wastage percentage, which would negate the shortage. They cited previous Tribunal judgments to support their position that demands based solely on statements without corroborative evidence are not valid.

3. The department's representative contended that the second statement did not retract the first one, as both statements consistently admitted to the improper clearance of goods without duty payment. They emphasized that the goods were cleared clandestinely, justifying the duty raised.

4. After hearing both sides and examining the documents, the Tribunal found that the second statement did not retract the first one, as both statements consistently admitted to the improper clearance of goods without duty payment. The Tribunal noted that the percentage of wastage shown in the first statement was specific to the goods manufactured by the appellant.

5. The Commissioner's order considered the quantum of waste before calculating the duty demand, allowing for certain wastage based on standard norms for different manufacturing stages. The Tribunal reviewed the reasoning behind the waste calculations and found that the duty demand was justified based on the admitted malpractice by the applicants.

6. The Tribunal concluded that the admitted facts of improper clearance and non-payment of duty by the applicants were sufficient to uphold the duty demand. They directed the applicants to pay the demanded duty amount as a pre-deposit, along with a penalty. The partners were held jointly and severally liable for the firm's dues, and upon payment, the remaining penalty amount would be waived. Compliance was ordered by a specified date.

(Separate Judgement by Judge R.K. Abichandani and Dr. T.V. Sairam)