2015 (4) TMI 202 - AT - Central Excise

Waiver of pre deposit - Clandestine manufacture and clearance of final products - Goods not recorded in RG-1 register - Invoices for goods not issued - Held that - corroboration tried to be achieved by the Adjudicating Authority from the other records i.e. daily production report, dispatch register, packing slips, all the delivery orders, working sheets etc. maintained by the appellant is not appropriate in as much as we prima facie find that the manufacturing process, as detailed by the appellant in their written submissions filed before us, lead us to conclude that the final product of the appellant being a very fragile and sensitive, results in lot of wastage, for which the appellants have also maintained proper records. The wastage arises at various stages ignoring the set of final cutting of the glass into proper shape and sizes resulting in emergence of cullets i.e. the resultant waste. The said cullets are never cleared by the appellant and are reused in the furnace for the manufacture of their final product, for which proper records are again maintained. Revenue's allegation of clandestine manufacture and clearance are based upon mainly the installed capacity as disclosed by one of the deponent employee, readwith the entries made in various records, resulting in theoretical calculations of production. There is virtually no evidence of procurement of excess raw material, conversion of the same into final product, clearance of the same through transporters and identification of the buyers and the consequent flow of money from the buyers to the appellants. It is well established, by catina of judgment that the allegations of clandestine removal cannot be upheld on the basis of surmises and conjunctures and are required to be established by production of positive and tangible evidence. In the present case, we do not even find, prima facie, preponderance of probabilities to conclude the allegations of clandestine removal against the assessee. - Stay granted.

Summary

Issues:
1. Duty demand confirmation against M/s Triveni Glass Ltd.
2. Imposition of penalties on various individuals associated with M/s Triveni Glass Ltd.
3. Allegations of clandestine manufacture and clearance of final products.
4. Violation of natural justice in the adjudication process.
5. Financial hardship plea by the appellant.

Analysis:
1. The judgment addresses the confirmation of duty demand amounting to Rs. 20.95 crores against M/s Triveni Glass Ltd. The Commissioner passed an order confirming the duty demand and imposing penalties on the company and its employees. The Tribunal previously set aside the order due to a violation of natural justice and remanded the matter for fresh adjudication.

2. Penalties were imposed on the Managing Director, Deputy Managing Director, and employees of M/s Triveni Glass Ltd. The appellant filed a detailed reply during the remand proceedings, contesting the allegations made in the show cause notice. However, the Commissioner upheld the demand and penalties, leading to the present appeal and stay petition.

3. The case involved allegations of clandestine manufacture and clearance of final products by M/s Triveni Glass Ltd. The Revenue's case was based on theoretical calculations of excess production, primarily relying on the installed capacity disclosed by an employee. The Tribunal found the evidence insufficient to establish clandestine removal, emphasizing the need for tangible evidence beyond theoretical calculations.

4. The Tribunal highlighted the importance of natural justice in the adjudication process. The Commissioner's approach of confirming the demand without adequate consideration of the appellant's submissions raised concerns. The Tribunal scrutinized the manufacturing process and records maintained by the appellant to assess the validity of the Revenue's allegations.

5. The appellant pleaded financial hardship, citing their status as a sick company declared by the BIFR. The Tribunal considered this plea along with the Supreme Court's decision in a relevant case, granting relief to the appellant by dispensing with the pre-deposit condition in the stay petitions. The Tribunal allowed the stay petitions unconditionally due to the financial circumstances of the appellant.

This comprehensive analysis covers the duty demand confirmation, penalties imposition, allegations of clandestine activities, natural justice concerns, and the appellant's financial hardship plea addressed in the judgment by the Appellate Tribunal CESTAT NEW DELHI.