2007 (1) TMI 82 - HC - Central Excise

Tribunal set aside OIO stating that evidences produced by assessee were not considered by adjudicating authorities while demanding the duty on account of clandestine removal Findings reached by Tribunal are findings of fact so does not give rise to any Question of Law

Summary

Issues:
Appeal against order of Customs Excise and Service Tax Appellate Tribunal setting aside duty demand and penalty for alleged clandestine removal of fabric from factory premises.

Analysis:
The case involved an appeal against the order of the Customs Excise and Service Tax Appellate Tribunal dated 3-8-2005, which had allowed the appeal of the respondent by setting aside the demand of Rs. 72,7071/- as duty adjudicated on alleged clandestine removal of fabric from the factory, along with the penalty levied by the Adjudicating Officer. The respondent manufacturer had paid duty on the removal of its product from the factory premises as required under statutory provisions. The Adjudicating Officer had levied duty and penalty based on a register found during a visit by Excise Authorities, which showed a difference in stock compared to the register maintained in RG-1 form, indicating possible clandestine removals of goods. The manufacturer contended that the register in question was not for recording production but for supervising factory workers, with production entries made on an estimate basis before actual weighing and entry in RG-1. Despite the manufacturer's explanation and supporting material, the Adjudicating Officer did not accept it.

The Tribunal, however, found the manufacturer's explanation plausible, noting the lack of verification by the Adjudicating Officer and the corroborative material provided regarding raw material procurement and production. The Tribunal accepted the manufacturer's explanation and subsequently deleted both the duty levy and the penalty. The Court observed that the findings of the Tribunal were factual and did not raise any legal questions. Consequently, the appeal was dismissed, upholding the Tribunal's decision to set aside the duty demand and penalty.