2009 (10) TMI 731 - AT - Central Excise

Summary

Issues involved: Interpretation of Section 11-A of Central Excise Act, 1944 regarding duty liability in case of non-commencement of manufacture and failure to intimate closure.

Summary:
The appellant contended that since manufacturing had not commenced, there could be no closure, and the duty levy under Rule 15 of Central Excise Rules, 2002 was not applicable. The Revenue alleged non-intimation of closure and sought duty recovery u/s 11-A of Central Excise Act, 1944.

The AR for the assessee argued that Section 11-A was not applicable as there was no evidence of manufacturing, and duty is only payable upon production. The appellant had informed the authorities that no production had taken place, and no goods were seized or evidence of manufacturing found.

The DR supported the duty liability for the period in question due to the appellant's failure to intimate exclusion from the Scheme upon permission being granted.

After hearing both sides, the Tribunal noted that there was no evidence of manufacturing, and duty is levied only upon actual production. The matter was remanded to the Adjudicating Authority for further inquiry to determine if manufacturing had indeed taken place based on various sources of evidence such as registration with the Industries Department, power connection application, and labor records.

In conclusion, the impugned order was set aside, and the matter was sent back for a fresh decision by the Adjudicating Authority based on proper evidence and a fair opportunity of hearing.