2009 (12) TMI 738 - AT - Central Excise

Summary

Issues involved: Detection of clearance of 8 ml. and 100 ml. shampoo without payment of duty, confirmation of demand, penalty imposition, registration discrepancies, clandestine manufacture, duty reworking, penalty re-quantification, imposition of interest.

Summary:

1. Demand Confirmation and Penalty Imposition:
The case involved the detection of clearance of 8 ml. and 100 ml. shampoo without duty payment, leading to a demand confirmation of Rs. 2,11,874/- and penalties under Section 11AC and Rule 173Q of the Central Excise Act, 1944. The lower appellate authority set aside most of the demand, resulting in an appeal by the Department.

2. Arguments by Department:
The Department argued that the Order-in-Appeal should be set aside as it did not consider voluntary statements admitting clearance without duty payment. It was highlighted that the respondents were registered only for 8 ml. shampoo, not for 100 ml. shampoo, and discrepancies in records indicated clandestine activities.

3. Respondents' Defense:
The respondents contended that statements by the Director should not be relied upon, and they raised concerns about the denial of cum-duty assessment and input duty credit by the original authority.

4. Tribunal's Findings:
Upon review, the Tribunal found admissions of clandestine activities by the respondents during the investigation. The explanations provided for defective sachets and re-trading of 100 ml. shampoo lacked supporting evidence like D3 intimation and proper record-keeping, leading to the quashing of the lower appellate authority's order.

5. Tribunal's Decision:
The Tribunal upheld the original authority's order, requiring reworking of duty amount with cum-duty price assessment. The penalty under Section 11AC was upheld but needed re-quantification, while the penalty under Rule 173Q was set aside. Interest under Section 11AB was deemed applicable. The matter was remanded to the original authority for re-quantification of duty, penalty, and interest.

6. Conclusion:
The appeal was partly allowed for remand as per the specified terms, ensuring a comprehensive review and reworking of duty, penalties, and interest in accordance with the law.