2017 (9) TMI 871 - AT - Central Excise

Penalty u/r 26 - manufacture - Tribunal had directed the Original Authority to first establish that appellant had the capacity to manufacture the quantity of Mosquito Bednets supplied to HSCC during the Financial Years 2000-01 & 2001-02 and then to give finding whether the appellant had manufactured the same in his factory - Held that - the Original Authority could not give the sustainable finding on the capacity of manufacture possessed by the appellant/manufacturer during the said Financial Years 2000-01 & 2001-02 - the impugned Order-in-Original is not sustainable and it was presumptive in nature - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Capacity of the appellant to manufacture the quantity of Mosquito Bednets supplied during the Financial Years 2000-01 & 2001-02.
2. Validity of the findings by the Original Authority regarding the appellant's manufacturing capacity.
3. Adequacy of evidence presented to establish the appellant's manufacturing capacity.
4. Sustainability of the impugned Order-in-Original dated 12/05/2009.

Analysis:

Issue 1: Capacity of the appellant to manufacture the quantity of Mosquito Bednets supplied during the Financial Years 2000-01 & 2001-02
The case revolved around the appellant's capacity to manufacture a significant quantity of mosquito nets supplied to HSCC. The appellant claimed to have procured the mosquito nets from another source, challenging the assertion that they manufactured the quantity in question.

Issue 2: Validity of the findings by the Original Authority regarding the appellant's manufacturing capacity
The Original Authority's findings were based on presumptions and assumptions rather than concrete evidence. The appellant contested the calculations made by the Original Authority, highlighting the lack of factual support for the conclusions drawn.

Issue 3: Adequacy of evidence presented to establish the appellant's manufacturing capacity
The Tribunal questioned the Departmental Representative about the evidence supporting the findings on the appellant's manufacturing capacity. It was revealed that there was no substantial information available on record to support the calculations and conclusions made by the Original Authority.

Issue 4: Sustainability of the impugned Order-in-Original dated 12/05/2009
Considering the lack of concrete evidence and the presumptive nature of the findings, the Tribunal held that the impugned Order-in-Original was not sustainable. As a result, the Tribunal set aside the order and allowed both appeals, granting the appellants consequential relief as per law.

This detailed analysis of the judgment highlights the key issues regarding the appellant's manufacturing capacity, the validity of findings, evidence presented, and the sustainability of the impugned order, providing a comprehensive overview of the legal proceedings and outcomes.