2010 (1) TMI 989 - AT - Central Excise

Summary

Issues:
- Appeal against the decision of Commissioner (Appeals) setting aside duty demand for Beta Blue Pigments
- Excess stock of finished goods and raw materials found during Central Excise officers' visit
- Reliance on notebooks of Ball Mill operator for demand of duty
- Lack of evidence supporting clandestine removal and case of Revenue

Analysis:
The judgment involves an appeal by the Revenue against the decision of the Commissioner (Appeals) regarding the demand of duty for 14471 Kgs. of Beta Blue Pigments manufactured by the appellants. The Central Excise officers discovered an excess stock of 1570 Kgs of finished Beta Blue Pigments and some raw materials during their visit, leading to separate show cause notices and proceedings. The Revenue's case heavily relied on two notebooks maintained by the Ball Mill operator, the statement of the excise clerk, and the excess stock of raw materials and finished goods.

The Tribunal heard both sides, where the learned DR for the Revenue highlighted the discrepancies in the stock found and the notebooks, indicating excess quantities beyond the RG-1 register. The excise clerk admitted that the excess stock was intended for clandestine removal. However, the Tribunal noted that the Commissioner (Appeals) had thoroughly analyzed the case, considering all aspects before concluding that the Revenue's case lacked merit. The partner's statement suggested that the excess stock of finished goods was for re-processing, and the Ball Mill operator's notebooks only reflected quantities sent for grinding, not the actual stock.

Moreover, the Ball Mill operator clarified that he was only concerned with the recorded processing quantities and not aware if the stock was for re-processing or fresh. The Tribunal observed a lack of evidence supporting clandestine removal, as no evidence of purchasers was presented other than the statement of the Ball Mill operator, which was deemed insufficient. Consequently, the Tribunal upheld the well-reasoned order of the Commissioner (Appeals) and rejected all appeals filed by the Revenue, emphasizing the absence of substantial evidence to support the Revenue's case.