2001 (2) TMI 173 - AT - Central Excise

Summary

Issues:
1. Duty demand based on alleged clandestine removal of excisable goods.
2. Eligibility for small-scale exemption under Notification No. 105/85.
3. Clubbing of clearances of different units for duty demand.
4. Scope of adjudication order exceeding the show cause notice.
5. Justifiability of duty demand and penalties.

Analysis:

1. The appeal was against an Order-in-Original confirming a duty demand of Rs. 87,526 for clandestine removal of excisable goods valued at Rs. 10,91,082.50 during a specific period. The Commissioner also imposed penalties and confiscation of seized goods. The appellant argued that the demand was based on assumptions and presumptions, and the adjudication order confirmed the demand on a different basis.

2. The appellant claimed to be a small-scale unit engaged in manufacturing components of generating sets and trading in parts. The duty demand was raised due to exceeding the exemption limit of Rs. 30 lakhs as per Notification No. 105/85. The appellant disputed the turnover calculation for the relevant years and argued that the findings in the order were beyond the scope of the show cause notice.

3. The adjudication order held that all clearances were made by another manufacturer, not the appellant, leading to clubbing of clearances for duty demand. The appellant contended that the demand should have been confirmed on the other manufacturer, and the penalties were unjustified as they never crossed the exemption limit.

4. The Tribunal noted discrepancies between the findings in the order and the allegations in the show cause notice. It emphasized that the order went beyond the notice's scope, making a different case. The demand and penalties were deemed unjustifiable as the appellant's eligibility for exemption was not adequately examined.

5. Ultimately, the Tribunal found the impugned order not maintainable on factual or legal grounds. It was set aside entirely, granting consequential relief to the appellant. The decision highlighted the importance of aligning adjudication orders with the scope of show cause notices and ensuring justifiability of duty demands and penalties based on concrete evidence and legal provisions.