2007 (5) TMI 54 - AT - Central Excise

Remission of duty Department contended that appellant is not remitted the duty in respect of manufactured good and accordingly demand were made alongwith penalty and interest - Held that revenue contention is not correct and allow the appeal

Summary

Issues:
Challenge to Commissioner (Appeals) order confirming demands and penalties under Central Excise Act, 1944 and Rules of 2001 and 2002 regarding non-marketable goods.

Analysis:
The appellant challenged the Commissioner (Appeals) order confirming demands and penalties under the Central Excise Act, 1944 and Rules of 2001 and 2002 related to non-marketable goods. The appellant, engaged in aerated water manufacturing, availed Modvat credit but failed to prove that the goods were non-marketable. The appellant's plea of goods being rejected due to contamination was rejected as there was no evidence of proper accountal or destruction of the goods. The Division Bench decision in a previous case involving the appellant was cited, emphasizing the lack of evidence to support the claim of non-marketability. The Tribunal held that the appellant did not follow the required procedures for disposing of defective goods, such as seeking remission of duty under Rule 49. The appellant's argument was deemed legally insufficient due to lack of corroborating evidence.

The appellant referred to a Division Bench decision in a separate case involving aerated water, highlighting issues of over-filled/under-filled bottles and drainage during production. The Tribunal in that case emphasized that goods must reach the marketable stage to be considered for remission of duty, which did not apply to goods not entered in the RG-1 register. The appellant also cited a Single Member decision supporting a similar plea, which was set aside based on the earlier Division Bench ruling. A conflict between the decisions in Amrit Bottlers Pvt. Ltd. and Hindustan Coca Cola Beverages Pvt. Ltd. was noted, requiring resolution by a larger bench. The appellant's failure to bring the conflicting decisions to the attention of the Tribunal was highlighted, leading to the decision to refer the matter to a larger bench for resolution.

In conclusion, the Tribunal upheld the orders-in-original confirming demands and penalties related to non-marketable goods, citing the appellant's failure to provide sufficient evidence and follow proper procedures for disposing of defective goods. The conflicting decisions in previous cases necessitated referral to a larger bench for resolution, emphasizing the importance of presenting all relevant information and legal precedents in similar cases.