2009 (12) TMI 814 - AT - Central Excise

Summary

Issues involved: Central Excise duty demand on shortage of Vanaspati, confiscation of seized crude palm oil, duty demand on seized oil, penalty imposition under various sections.

Central Excise Duty Demand on Vanaspati Shortage:
The appellant's factory was visited by Central Excise Officers where a shortage of 12.51 m.t. of Vanaspati Ghee was found. The appellant accepted the shortage and paid the duty. The Jt. Commissioner confirmed the duty demand, interest, and imposed a penalty under Section 11AC of the Central Excise Act. The Commissioner (Appeals) upheld this decision, leading to the appellant filing an appeal.

Confiscation of Seized Crude Palm Oil:
The Department alleged that the crude palm oil found in the appellant's factory was illicitly imported without duty payment. The appellant claimed to have purchased it from a specific company, which was confirmed by the company's director. However, a chemical test revealed the oil to be of non-edible grade. The Jt. Commissioner ordered the confiscation of the seized oil and tanker under the Customs Act, along with duty demand and penalties. The Commissioner (Appeals) upheld this decision.

Duty Demand on Seized Oil and Penalty Imposition:
The appellant argued that the seized oil was purchased from a legitimate source and the test reports were unreliable as they were not allowed to request a retest. The Department defended the confiscation and duty demand, stating the seized oil was of illicit origin. The Tribunal found that the test report was inconclusive due to the appellant's denied retest request. As the burden of proof lay with the Department, the duty demand, confiscation, and penalties were set aside.

In conclusion, while the duty demand for the Vanaspati shortage was upheld, the penalty was reduced. The confiscation of the seized oil and tanker, duty demand on the seized oil, and penalty under Section 112 of the Customs Act were set aside. The appeal was disposed of accordingly.