2007 (3) TMI 403 - SC - Central Excise

Clandestine removal Penalty - 100% EOU - Clandestine removal without showing in the books of accounts were sold in the domestic tariff area in excess of the permissible limit without getting sanction from the concerned authority - evasion of duty by the assessee - Penalty was also imposed on the Managing Director of the assessee Company - Order of the Tribunal does not record reasons in support of the conclusion arrived at - assessee states that he will not be able to support the order passed by the Tribunal and prays that the same be set aside and the case be remitted back to the Tribunal Held that - Order is set aside and case is remitted back to the Tribunal appeal is disposed of accordingly.

Summary

Issues:
1. Duty evasion and penalty imposition by Central Excise Division on an export-oriented unit.
2. Tribunal's decision on reducing duty and penalty.
3. Lack of reasons recorded by the Tribunal in its order.
4. Appeal for setting aside the Tribunal's order and remitting the case for a fresh decision.
5. Disposal of Civil Appeals.

Analysis:

1. The respondent, a 100% export-oriented unit manufacturing yarn, faced allegations of clandestine removal and sale of goods exceeding permissible limits without proper authorization, leading to duty evasion. Two show cause notices were issued based on the Central Excise Division's findings.

2. The Authority-in-Original confirmed the duty demand and imposed penalties, including on the Managing Director of the company. The assessee appealed to the Tribunal, which partially set aside the order by reducing the duty and penalty imposed.

3. Upon review, the Supreme Court found that the Tribunal's order lacked recorded reasons supporting its conclusions. The respondent's counsel conceded the inability to defend the Tribunal's decision and requested setting it aside for a fresh decision, leaving all contentions open.

4. Accepting the counsel's submission, the Supreme Court set aside the Tribunal's order and remitted the case for a fresh decision in accordance with the law. All contentions were left open for both parties, and the Civil Appeals were disposed of accordingly.

5. Additionally, in a related appeal (C.A. No. 5418/2002), the Supreme Court, considering the previous detailed order in C.A. Nos. 4989-1990/2001, set aside the impugned order and remitted the case back to the Tribunal for a fresh decision in accordance with the law, thereby disposing of the appeal.