2014 (4) TMI 85 - AT - Central Excise

Waiver of pre-deposit of duty - Incomplete entry in RG-1 Register - Held that - major part of the demand stand confirmed against the applicant on the basis of weighment slips recovered from Jain Dharamkanta. We have seen the weighment slips produced before us. It is seen that the name of the appellant does not appear on the said weighment slips and there are no signature of any authorised representative of the appellant. The Revenue has taken the said weighment slips as belonging to the appellant on the basis of the statement of Shri Rajendra Prasad Jaiswal who could not be cross-examined on account of his demise. - stay granted on this count. Regarding confirmation of demand on the basis of weighment slips recovered from the appellant factory - Held that - appellant does not have a good prima facie case on the said count. - stay granted partly.

Summary

Issues Involved:
1. Pre-deposit of duty and penalty amounting to Rs.2,68,12,628/-.
2. Allegations of clandestine removals and confirmation of demand.
3. Denial of SSI exemption benefit.
4. Financial condition of the appellant.

Analysis:

Issue 1: Pre-deposit of duty and penalty
The appellant, engaged in manufacturing re-rolled iron products, faced allegations of excess goods not entered in records during a factory visit. Investigations revealed discrepancies in production registers and weighment slips, leading to proceedings confirming demand and imposing penalties. The Commissioner upheld the demand and penalties, which were challenged by the appellant.

Issue 2: Allegations of clandestine removals
The demand against the appellant was primarily based on weighment slips from Jain Dharamkanta, with contentions regarding the authenticity and ownership of these slips. The Revenue's case rested on the statement of a deceased individual, Shri Rajendra Prasad Jaiswal, linking the slips to the appellant. However, the Tribunal found insufficient evidence to conclusively establish the appellant's involvement in clandestine removals based on these slips.

Issue 3: Denial of SSI exemption benefit
The appellant argued for the extension of Small Scale Industry (SSI) exemption, which would significantly reduce the duty demand. The Commissioner had denied this benefit, citing clearances from another unit of the appellant. The Tribunal considered this argument but ultimately directed a partial deposit based on the production register entries and financial circumstances, without granting the SSI exemption.

Issue 4: Financial condition of the appellant
The appellant's financial condition, reflected in a balance sheet showing minimal profit, was a factor considered by the Tribunal in determining the pre-deposit amount. Despite acknowledging the appellant's financial constraints, a substantial deposit was ordered to be made within a specified timeframe to continue the appeal process and stay recovery of the remaining duty and penalties.

In conclusion, the Tribunal directed the appellant to deposit Rs.30 lakhs within eight weeks, failing which the demand and penalties would stand confirmed. The decision balanced the need for a deposit with the appellant's financial situation, providing a pathway for appeal while ensuring compliance with legal requirements.