2015 (5) TMI 1063 - AT - Central Excise

Demand - non-accountal for the entire quantity of plywood manufactured by appellant during the period from 16.12.2000 to 31.3.2004 - Held that - it is found that the whole case of the department is on the ground that 2 sq. mtrs face veneer are required to produce 1 sq mtr plywood. As submitted by appellant, other than the statement of Shri P.K. Dash, no evidence has been gathered and no technical literature has been used and no sample has been drawn and tested. In these circumstances, the submission of the appellant that the impugned order has no merit has to be accepted. Accordingly, the impugned order is set aside. - Decided in favour of appellant

Summary

Issues Involved:
Manufacture of plywood under Chapter heading 44, demand for Central Excise duty, imposition of penalty, reliance on statement of Accountant, lack of further verification or evidence, calculation of raw material requirement, validity of impugned order.

Analysis:
The Appellant, engaged in manufacturing plywood, faced a demand for Central Excise duty amounting to Rs. 14,62,376 with interest for the period from 16.12.2000 to 31.3.2004 due to alleged non-accounting of the entire quantity of plywood manufactured. The demand was based on the assumption that 2 sq. mtrs. of face veneer are needed for 1 sq. mtr. of plywood production. The case rested heavily on the statement of the Appellant's Accountant, Shri P.K. Dash, who vaguely mentioned the veneer requirement. The Appellant's counsel argued that no further verification was conducted, no samples were drawn for verification, and no evidence of clandestine removal or excess raw material consumption was presented. Additionally, no technical expert's statement or supporting literature was provided to validate the department's calculation.

Upon review, the Tribunal noted the lack of concrete evidence supporting the department's claim that 2 sq. mtrs. of face veneer are essential for manufacturing 1 sq. mtr. of plywood. The Tribunal concurred with the Appellant's counsel that besides Shri P.K. Dash's statement, no substantial evidence, technical analysis, or verification was undertaken to substantiate the claim. Consequently, the Tribunal found the impugned order lacking merit and set it aside, allowing the appeal in favor of the Appellant. The decision was announced in open court on 27/5/2015, providing the Appellant with consequential relief, if applicable.