2009 (8) TMI 1013 - AT - Central Excise

Summary

Issues involved: Allegation of clandestine clearances, demand of duty, penalty under Section 11AC of the Central Excise Act, 1944, discrepancy in balance sheet and RT 13 returns, evidence of trading activities, principles of Natural Justice.

Summary:

Allegation of Clandestine Clearances:
The case involved M/s. Sarita Software and Industries Ltd. (SSIL) being accused of clandestine clearances based on discrepancies between production figures in balance sheets and statutory returns. The Commissioner demanded duty and penalty under Section 11AC of the Act, which was challenged before the tribunal.

Principles of Natural Justice:
The tribunal found that the burden is on the Revenue to prove clandestine removal of goods without payment of duty. Lack of evidence supporting the allegations led to the order being set aside for re-examination by the Commissioner in light of the evidence and principles of Natural Justice.

Revised Demand and Penalty:
Upon revision, the demand for clandestine clearances was reduced to Rs. 1,00,11,651/- with applicable interest. The penalty under Section 11AC was upheld based on the findings that the evidence of trading activities provided by SSIL was not sufficient to negate the allegations.

Evidence and Findings:
The impugned order highlighted discrepancies in figures, lack of evidence supporting trading claims, and failure to produce relevant documents during the investigation. The Commissioner's refusal to consider the documents furnished by SSIL was deemed a violation of Natural Justice, leading to the order being set aside.

Conclusion:
The tribunal set aside the impugned order due to lack of evidence and failure to consider the documents provided by SSIL. The appeal filed by SSIL was allowed, emphasizing the importance of adhering to principles of Natural Justice in such cases.