2013 (11) TMI 1424 - AT - Central Excise

Clandestine manufacture and removal of goods - Waiver of Pre-deposit of duty Penalty u/s 11AC of the Central Excise Act, 1944 Personal penalty under Rule 26 of the Central Excise Rules, 2002 Held that - There are enough substance in the allegation of the Department that the goods were manufactured and cleared clandestinely without payment of duty - The Department has adduced credible evidences in the form of parallel invoices, a fact admitted by one of the Directors that the goods mentioned in these invoices were cleared clandestinely without payment of duty - the exact quantity of goods, could be ascertained at the time of disposal of the Appeals, after considering the evidence on record - Prima facie the Applicants could not able to show that it is a case of no evidence - the claims and counter claims rest on the evidences adduced by both sides, which require detail analysis and could be possible at the time of the disposal of the Appeal - applicant directed to deposit 25% of the duty as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues involved:
Waiver of predeposit of duty and penalties under Central Excise Act, 1944 for clandestine manufacture and removal of goods without payment of duty.

Analysis:
The Applicants sought waiver of predeposit of duty and penalties totaling Rs.3.04 crore imposed for clandestine manufacture and removal of goods without payment of duty. The Adjudicating Authority confirmed the demand based on documentary evidence and statements from employees and Directors. The Applicants argued that the demand was based on assumptions, highlighting discrepancies in the evidence. The Revenue contended that ample evidence, including data from a pen-drive, corroborated the clandestine activities. The Tribunal noted conflicting claims and decided that detailed analysis was required for final judgment. Considering financial hardship, the Tribunal directed the Applicant to deposit 25% of the confirmed duty within eight weeks, failing which all Appeals would be dismissed.

The main dispute revolved around whether the Applicants clandestinely manufactured and cleared goods without duty payment. The Revenue relied on data from a pen-drive, manual registers, statements of employees, and other evidence to support their claim. The Applicants contested the evidence, arguing that the retrieved data was inadmissible and that the premises where the data was found did not belong to them. The Tribunal found substance in the Revenue's allegations, noting credible evidence linking the Applicants to the clandestine activities. The Tribunal acknowledged the need for further examination of evidence but required a deposit pending final judgment.

The Tribunal considered the conflicting arguments regarding the clandestine activities and the admissibility of evidence. While the Applicants disputed the evidence's relevance and authenticity, the Revenue presented various corroborative evidence to support their case. The Tribunal decided that a detailed analysis of the evidence was necessary for a final decision. In light of this, the Tribunal directed the Applicant to deposit a portion of the confirmed duty within a specified timeframe, failing which the Appeals would be dismissed. This decision aimed to balance the interests of the Applicants and the Revenue while following legal principles established by higher courts.