2001 (11) TMI 160 - AT - Central Excise

Summary

Issues involved: Duty demand u/s 11A, penalty u/r 173Q and 209A of C.E. Rules, seizure of note books, clandestine removal, corroborative evidence, re-computation of duty liability, penalty justification.

Summary:
The appeal before the Appellate Tribunal CEGAT, Chennai arose from an Order-in-Original confirming duty demand u/s 11A and imposing penalties u/r 173Q and 209A of C.E. Rules. The case involved the seizure of note books from the appellants' manufacturing unit, discrepancies in stock, and allegations of clandestine removal.

The officers seized note books showing production details and noted shortages of raw materials and excess quantities of certain inks. Despite initial admission by one of the appellants, later disowning of the note books raised doubts. The Commissioner confirmed the demands based on the initial admission.

The appellants argued that confirmation of clandestine removal required corroborative evidence beyond seized note books, citing legal precedents. They contended for re-computation of duty liability and challenged the penalties imposed, stating lack of personal involvement in day-to-day affairs.

After careful consideration, the Tribunal confirmed the demands based on note book No. 1 but required re-computation considering legitimate deductions. However, demands related to note books 2 & 3 were quashed due to lack of correlation with goods manufactured and absence of corroborative evidence. The matter was remanded for re-examination of penalty imposition under Rule 209A.

In conclusion, the Tribunal disposed of both appeals by confirming demands from note book No. 1, quashing demands from note books 2 & 3, and remanding the matter for re-adjudication on penalty imposition along with duty liability, directing detailed explanation from the appellants.