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2011 (9) TMI 117 - AT - Central ExciseExcess goods found during stock taking - confiscation under rule 25 - Penalty u/s 11AC - Held that - the weighing slips were not signed by the witnesses. - it is not surprising that the Commissioner (Appeal) directed cross examination of the witnesses. This direction was not complied with in remand proceedings. Reason for not doing so is not specified in the Appeal memorandum either. - no interfere with the order of the Commissioner (appeals) - decided against the revenue.
Issues:
1. Confiscation of excess goods found during stock taking 2. Demand of duty exceeding exemption limit under notification 8/2002-CE 3. Imposition of penalties on trading units and individuals 4. Adjudication of Show Cause Notice 5. Appeal against adjudication order 6. Legality of seizure and weighing process 7. Compliance with procedural requirements during adjudication 8. Cross-examination of witnesses and natural justice Confiscation of Excess Goods: The department found 83.204 MTs of Mild Steel Bars not accounted for during stock taking. A show cause notice was issued proposing confiscation and duty demand exceeding the exemption limit under notification 8/2002-CE. The Assistant Commissioner ordered confiscation of excess goods, duty confirmation, and penalties on the Respondents and trading units. However, the Commissioner (Appeals) set aside the duty demand, penalties, and confiscation, ruling the duty demand as unsustainable. The Revenue appealed, challenging the finding that the seizure was bad in law. Legality of Seizure and Weighing Process: The legality of the seizure was questioned based on the weighing process. The Commissioner (Appeals) set aside the seizure, redemption fine, and penalty, citing procedural defects in the weighing process. The Revenue contested this decision, arguing that the weighing process was correctly done, and the seizure was valid. The weighing slips were not signed by witnesses, leading to doubts about the accuracy of the process. The Tribunal upheld the decision of the Commissioner (Appeals), emphasizing procedural defects in the weighing process and lack of cross-examination of witnesses. Compliance with Procedural Requirements: The Tribunal noted that the adjudicating authority failed to follow the specific direction for cross-examination of witnesses, leading to a lack of opportunity for the Respondents to present their case effectively. The Tribunal held that the process of weighment was vitiated by procedural defects, affecting the accuracy of the detected discrepancies in stock. The failure to comply with procedural requirements was deemed a violation of natural justice, resulting in the rejection of the Revenue's appeal and disposal of the Respondents' cross-objection. This detailed analysis of the judgment highlights the issues related to the confiscation of excess goods, legality of seizure and weighing process, and compliance with procedural requirements during adjudication, providing a comprehensive overview of the legal proceedings and outcomes.
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