2013 (12) TMI 446 - AT - Central Excise

Clandestine removal and undervaluation of Frit waiver of Pre-deposit Held that - The entire demand raised is based upon the consumption of natural gas Prima facie, the demand cannot be sustained as for manufacturing of final product, only gas is not the sole material, but it also require other items like Quartz, Feldspar, Zinc, Borax Powder, Calcium and Dolomite There was no evidence as regards procurement of these items, is brought on record Following M/s Vishwa Traders Pvt. Ltd., & Others Versus CCE Vadodara 2011 (10) TMI 94 - CESTAT, AHMEDABAD - on the point of clandestine removal, there is no case made out by the Department - As regards the demand on undervaluation, since the issue needs deeper consideration Thus, the appellant directed to deposit Rupees Twenty Five lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues involved:
Waiver of pre-deposit for duty confirmed, under-valuation demand, alleged clandestine removal of 'Frit'.

Analysis:
The Stay Petition sought a waiver of pre-deposit for duty, interest, and penalty. The main issues were under-valuation demand and alleged clandestine removal of 'Frit'. The appellant's counsel argued for dividing the issue into under-valuation and clandestine removal demands, emphasizing a lack of evidence for clandestine manufacturing and clearance. The appellant had already deposited Rs. 25 lakhs. The Additional Commissioner contended that undervaluation was evident from supplier statements, linking gas consumption to alleged clandestine production. The Tribunal noted the lack of evidence supporting clandestine removal, highlighting the reliance on gas consumption alone for the demand. The Tribunal found the demand unsustainable without evidence of other required materials for manufacturing 'Frit'. Referring to a relevant High Court judgment, the Tribunal concluded that no case was established for clandestine removal. Regarding undervaluation, the deposited amount was deemed sufficient for appeal consideration. Consequently, the waiver of pre-deposit for the remaining amounts was allowed, with recovery stayed pending appeal disposal.