2006 (7) TMI 687 - AT - Central Excise

Summary

Issues: Duty demand on finished fabrics, confiscation of processed fabrics, penalty imposition, credibility of evidence, retraction of statement, clandestine clearance of goods

In the judgment by the Appellate Tribunal CESTAT MUMBAI, the Commissioner of Central Excise confirmed a duty demand of Rs. 35,62,704 on finished fabrics admeasuring 9,89,640 linear meters due to alleged clandestine clearance without proper record-keeping or duty payment. Additionally, 1198.4 linear meters of processed fabrics were confiscated with an option for redemption upon payment of Rs. 5000, and a penalty equal to the duty amount was imposed on the appellants. The period in question was from 23-1-1998 to 20-2-1998.

The absence of representation by the appellants led to the Tribunal hearing the learned SDR and examining the case records. The duty demand was substantiated with documentary evidence in the form of 11 loose sheets, acknowledged by various individuals involved in the production process. The sheets detailed production reports for each day, including party names, processing locations, and dates, with explanations provided by the proprietor and others.

Despite the appellants partially paying duty, the proprietor's claim of coercion during his statement, which he retracted later, was dismissed by the Commissioner due to duty payment post the alleged coercion incident. The Tribunal found sufficient evidence indicating the clandestine clearance of processed fabrics by the appellants, upholding the duty demand.

Considering all aspects, the Tribunal reduced the penalty to Rs. 8,00,000 and upheld the confiscation of the processed fabrics. The appeal was partly allowed under the revised penalty terms. The judgment emphasized the credibility of evidence, retraction of statements, and the unlawful clearance of goods as crucial factors in determining the case outcome.