2001 (5) TMI 952 - AT - Central Excise

Summary

Issues:
- Demand of duty based on comparison of figures in RG-1 record and Annual Statistical Records.
- Explanation provided by the appellant regarding discrepancies in records.
- Tribunal's acceptance of the explanation and decision on demand of duty and penalty.
- Decision on limitation period for the demand of duty.

Analysis:

Issue 1: Demand of duty based on comparison of figures
The judgment addresses the demand of duty against M/s SAIL and the penalty imposed by comparing figures in the RG-1 record and Annual Statistical Records. The Tribunal notes that a similar issue was previously considered in the appellant's case, where the explanation provided by the appellant regarding the differences in records was accepted. The Tribunal emphasizes the importance of proving clandestine manufacture and clearance by the Revenue through sufficient evidence. It is highlighted that the onus to prove such activities lies with the Revenue.

Issue 2: Explanation provided by the appellant
The appellant explained that discrepancies in figures were due to the different methods of compilation adopted by the statistical department for Annual Statistical Records and the requirements for maintaining Central Excise records. The explanation included details about the processes followed by different departments within the steel plant for recording and dispatching materials. The appellant clarified that discrepancies could arise due to time gaps in clearance processes and differences between sectional weight and actual weight.

Issue 3: Tribunal's acceptance of the explanation
After considering the appellant's explanation, the Tribunal found it satisfactory in clarifying the differences between the figures in the two sets of records. The Tribunal agreed with the appellant's submission that the demand of duty could not be sustained based on the discrepancies shown in the annual financial accounts and RG-1 register. The Tribunal also supported the appellant's argument that the demand was barred by limitation, as the show-cause notice was issued before the circulation of annual financial accounts, indicating no suppression by the appellants.

Issue 4: Decision on limitation period
The Tribunal concluded that the demand of duty against the appellants was not justified, given the satisfactory explanation provided and the absence of evidence supporting clandestine activities. The Tribunal ruled in favor of the appellant on both the merits of the case and the point of limitation. Consequently, the appeal was allowed with consequential relief granted to the appellants based on the Tribunal's findings.

In summary, the judgment highlights the importance of providing explanations for discrepancies in records, the burden of proof on the Revenue for clandestine activities, and the consideration of limitation periods in demanding duty. The Tribunal's decision in this case was based on the satisfactory explanation provided by the appellant and the lack of evidence supporting the demand of duty and penalty.