2008 (10) TMI 501 - AT - Central Excise

Summary

Issues:
- Appeal against Order-in-Appeal dated 29-9-2006 passed by the Commissioner of Central Excise (Appeals), Chandigarh regarding duty demand and penalty imposition based on seized Daily Plant Log Sheets.
- Allegation of clandestine removal of Liquid Carbon Dioxide by the Revenue.
- Discrepancies in production records and losses claimed by both parties.
- Verification of losses and production records for central excise purposes.
- Failure to maintain daily stock account register for January and February 2005.

Analysis:
The appeal before the Appellate Tribunal CESTAT, NEW DELHI stemmed from a dispute over duty demand and penalties imposed by the Adjudicating Authority, confirmed by the Commissioner (Appeals), based on discrepancies found in the production records of Liquid Carbon Dioxide and Dry Ice by the Respondents. The Revenue alleged clandestine removal of goods, citing a lack of maintenance of the daily stock account register for January and February 2005, leading to the seizure of Daily Plant Log Sheets and a subsequent show cause notice for duty demand and penalties.

During the proceedings, the Revenue contended that the Commissioner (Appeals) overlooked the clandestine removal aspect and highlighted discrepancies between the Daily Plant Log Sheets and the Daily Stock Account, emphasizing significant losses in production. On the other hand, the Respondent's Advocate reiterated the explanations provided for the discrepancies, disputing the extent of losses claimed by the Revenue and asserting that the explanations were not adequately verified by the Adjudicating Authority.

Upon careful consideration, the Tribunal observed that the charge of clandestine removal was primarily based on the Daily Plant Log Sheets, as the production was not recorded in the Daily Production Register for a specific period. The Tribunal noted conflicting claims regarding the percentage of losses, with the Commissioner (Appeals) reporting lower losses than the Adjudicating Authority. It was emphasized that establishing clandestine removal solely based on the Daily Plant Log Sheets without corroborative evidence was insufficient.

Ultimately, the Tribunal found that the absence of production records for January and February, coupled with discrepancies in the reported losses, necessitated a more thorough examination by the Adjudicating Authority. Consequently, the Tribunal set aside the previous orders, remanding the matter back for a detailed verification of the losses as contended by the Respondents. The appeal by the Revenue was allowed by way of remand, with the cross objection being disposed of accordingly.