2009 (1) TMI 637 - AT - Central Excise

Summary

Issues involved: Appeal against confirmation of demand of duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944 based on alleged clandestine clearance of goods.

Summary:
The case revolved around the alleged clandestine clearance of goods by an EOU in excess of the quantity covered by invoices issued for DTA clearances. The excise authorities initiated proceedings based on Monthly Manufacturing Reports (MMRs). The Tribunal's earlier order highlighted that MMRs were internal reports prepared on estimates and not meant to satisfy any statutory requirement. It was emphasized that private records of a manufacturer alone are insufficient to establish the charge of clandestine removal of excisable goods. The Tribunal found no evidence of extra quantity of inputs being used or any physical removal of goods beyond the mentioned invoices. The employees' statements did not support the charge of clandestine removal. Consequently, the Tribunal set aside the earlier decision and allowed the appeal.

In the impugned order, the Commissioner considered additional factual details but primarily relied on MMRs to sustain the demand. However, the Tribunal found that no other evidence was presented to establish the charge of clandestine removal against the assessee. Given the precedent set in the Tribunal's earlier order in the same case, the impugned order was set aside, and the appeal was allowed.