2007 (1) TMI 481 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand and imposition of penalties for clearing texturised yarn without payment of duty.

Analysis:
The appellants filed appeals against the impugned order confirming a demand of Rs. 98,813/- and imposing penalties for allegedly clearing texturised yarn without paying duty. The Revenue officers found no shortage or excess during verification of inputs and finished products at the factory premises. However, a rough sheet recovered during a search contained entries of carton-wise details and weights not reflected in statutory records, leading to the allegation of duty evasion.

The appellants argued that the entries in the rough sheet were made when the electronic weighing machine was out of order, necessitating manual weighment of cartons. Subsequently, the cartons were reweighed on the electronic machine, and the weights were recorded in private and then statutory records. The Excise clerk's statement confirmed this process, denying any admission that the quantities mentioned in the rough sheet were cleared without duty payment. The finished goods were cleared in serially numbered cartons, which were not received back by the appellants.

The Revenue contended that the appellants failed to reconcile the rough sheet quantities with statutory records, justifying the demand. However, upon examination of the rough sheet and the Excise clerk's statement, it was evident that the manual weighment due to the malfunctioning electronic machine caused slight variations in weight between the rough sheet and subsequent records. The Excise clerk's explanation, coupled with the absence of evidence proving duty evasion for the quantities in the rough sheet, led to the conclusion that the demand was not sustainable. Consequently, both appeals were allowed, with any consequential relief granted as per the law.