2011 (2) TMI 31 - AT - Central Excise

Demand of duty and penalty - and penalty on one of the director - clandestine removal of the goods from the factory and the shortage of raw materials - appellant discharged the duty liability on the quantity of goods, which the revenue claims as being clandestinely removed - court appreciated the evidences in form of AR-1 returns, connected papers and connected invoices; set aside the order and remand the matter back to the Adjudicating Authority

Summary

Issues involved: Duty and penalty on the appellant company and penalty on one director for alleged clandestine removal of goods and shortage of raw materials.

Analysis:
1. The appeals were against Order-in-Original No.6/2009 dated 28.5.2009. The main issue was the duty and penalty imposed on the appellant company and one director for the alleged clandestine removal of goods and shortage of raw materials.

2. The appellant filed a Miscellaneous Application to present documentary evidence showing that they had discharged the duty liability on the goods claimed as clandestinely removed. The documents were not produced earlier due to the illness of the person handling the matter. The bench was requested to consider these documents and decide the issue.

3. After hearing both parties, it was found that the revenue's case was based on clandestine removal of goods from April 2007 to August 2007. If the appellant could provide evidence to the Adjudicating Authority regarding the clearance of goods with duty payment, the Authority should consider such evidence. Since the evidence was not produced earlier, the case was remanded back to the Adjudicating Authority for a fresh decision. The Authority was directed to consider all evidence, including AR-1 returns, papers, and invoices, and ensure natural justice principles were followed. The Authority was given three months to conclude the matter from the date of production of the order.

4. The decision to remand the case was made without expressing any opinion on the merits of the case, keeping all issues open for further consideration. The Adjudicating Authority was instructed to specifically address the issue of clandestine removal within the given timeframe. The appeals were allowed by way of remand, and the Miscellaneous Application was disposed of accordingly.