2000 (1) TMI 86 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty under Rule 173Q and demand confirmation under Section 11A of the Central Excise & Salt Act, 1944.
2. Allegations of evasion of Central Excise Duty by M/s. Ramsnehi Synthetics.
3. Seizure of excess stock and shortage of finished goods during factory inspection.
4. Discrepancies in private records and non-accountal of manufactured goods.
5. Classification of HDPE tapes under Chapter Heading 39 and duty liability.
6. Pleas regarding slippage and short receipt of HDPE granules.
7. Dispute over the quantity short accounted for and duty demand.
8. Classification of goods under chapter sub-heading 3920.32.

Analysis:
1. The impugned order imposed penalties and confirmed demands against the company and individuals under Rule 173Q and Section 11A of the Central Excise & Salt Act, 1944. The allegations of evasion of Central Excise Duty by M/s. Ramsnehi Synthetics were based on discrepancies found during factory inspections, including excess stock of raw materials and shortage of finished goods, leading to the seizure of goods believed to be liable for confiscation.

2. The Central Excise Authorities alleged that the appellants manufactured and cleared HDPE tapes without accounting for them in statutory records, resulting in duty evasion. The appellants argued that the goods were classifiable under Chapter Heading 39, citing exemptions and classification criteria. They contended that HDPE tapes were plastic articles, not textile materials, and challenged the duty liability for the period in question.

3. The appellants raised concerns about slippage and short receipt of HDPE granules, disputing the quantity accounted for by the authorities. However, the authorities found discrepancies in the appellants' claims and upheld the findings regarding the quantity short accounted for, leading to the demand for duty payment.

4. The Tribunal upheld the findings on the quantity short accounted for but remanded the matter to determine the demand based on the correct classification of goods under chapter sub-heading 3920.32. The appeal was disposed of with the direction to the Commissioner to calculate the demand at the applicable duty rate for goods falling under the revised classification.