2007 (6) TMI 477 - AT - Central Excise

Clandestine removal - Shortage of final product and cenvatted raw material - Held that - apart from shortages detected at the time of visit of the officers, which in any case are on the lower side, there is no evidence on record to establish clandestine manufacture and removal of goods - there is, virtually, no evidence on record to establish the fact of clandestine removal, onus for which lies upon the Revenue - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Shortages of final products and raw materials found during verification.
2. Proceedings initiated against the appellant for duty demand, interest, and penalty.
3. Lack of evidence to establish clandestine manufacture and removal of goods.

Analysis:
1. The appellant, engaged in manufacturing P&P medicaments, faced proceedings after shortages of final products and raw materials were discovered during a visit by Central Excise officers. The authorized signatory admitted to these shortages, leading to the initiation of proceedings resulting in a demand for duty, interest, and imposition of a personal penalty under Section-11AC.

2. The order passed by the Deputy Commissioner confirming the duty demand and penalties was upheld by the Commissioner (Appeals), prompting the appellant to appeal the decision. During the appeal hearing, the appellant was represented by an advocate, and the Revenue was represented by an officer. The appellate authority, Ms. Archana Wadhwa, considered the arguments presented by both sides.

3. Upon review, the appellate authority noted that while shortages were detected during the officers' visit, there was a lack of concrete evidence to prove clandestine manufacture and removal of goods. The statement of the authorized signatory only admitted to the shortages without confirming any unauthorized removal of goods without duty payment. As the onus to establish clandestine removal lay with the Revenue, the appellate authority found insufficient evidence to support the allegations. Consequently, the authority extended the benefit of doubt to the appellant, setting aside the previous order and allowing the appeal with consequential relief.

This detailed analysis of the judgment outlines the issues involved, the legal proceedings, and the rationale behind the appellate authority's decision to overturn the previous order based on the lack of evidence supporting the allegations of clandestine activities.