2008 (12) TMI 525 - AT - Central Excise

Summary

Issues:
1. Duty evasion and suspension of license.
2. Allegations of theft or replacement of goods.
3. Lack of documentary evidence and conflicting statements.
4. Prima facie case against the appellant.
5. Financial hardship and lack of supporting evidence.
6. Deposit requirement and waiver of penalties.

Analysis:
1. The appellant, a 100% EOU engaged in fabric processing, faced suspension of license due to duty evasion of Rs. 2.49 crores related to fraudulent exports. The duty-free imported raw materials were seized upon suspension.

2. Subsequently, a visit revealed missing or replaced goods, leading to proceedings confirming duty of Rs. 33,00,360/- and penalties under Section 114A of the Customs Act, 1962. Allegations of theft or replacement were made, supported by an FIR filed with the Police.

3. The appellant claimed the goods were stolen or replaced, but failed to provide concrete evidence. Conflicting statements arose regarding the timing of shortages detection and intimation to the Revenue, raising doubts about the appellant's credibility.

4. The Tribunal found no prima facie case in favor of the appellant. Lack of concrete evidence, the timing of events, and the appellant's possession of the warehouse keys cast suspicion on their claims of theft or replacement.

5. Despite claims of financial hardship and factory closure, no supporting financial documents were presented. The Tribunal emphasized the duty evasion amount and the appellant's unauthorized clearance of goods in the market, questioning their financial status.

6. Considering all factors, the Tribunal directed the appellant to deposit 50% of the duty amount within ten weeks. Upon compliance, the pre-deposit of the remaining duty and penalties would be waived, balancing the financial obligations of the appellant with the duty evasion allegations.