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2001 (6) TMI 162 - AT - Central Excise
Issues involved: Duty demand, penalty under Section 11AC, penalty under Rule 173Q, authenticity of recovered documents, evasion of duty, imposition of penalties, legality of evidence, electricity consumption as evidence, cross-examination of witnesses, period of evasion, imposition of penalties on employees.
Summary: The three appeals were filed against the order confirming duty demand and penalties imposed under Section 11AC and Rule 173Q. The appellants, engaged in cement manufacturing, contested the duty evasion allegations based on recovered documents and electricity consumption. They argued against penalties and time-barred demands. The Commissioner upheld the duty demand and penalties. Upon review, the Tribunal found discrepancies in the evidence presented. The empty bag register and note-book were disowned by the appellants, and witness statements lacked corroboration. The electricity consumption alone was deemed insufficient to prove clandestine activities. No concrete evidence of excess production or removal was found. Citing legal precedents, the Tribunal emphasized the need for direct evidence to establish duty evasion. However, the removal of goods without duty payment during a specific period was proven from the note-book entries. The duty payable on the suppressed goods was calculated and upheld. Regarding penalties, the Tribunal ruled out the imposition of penalties under Section 11AC due to the period in question predating its enactment. Penalties under Rule 173Q and Rule 209A were set aside for lack of justification. The appeals of appellant nos. 2 and 3 were accepted, while the duty demand against the company for a specific period was confirmed, with penalties under Section 11AC and Rule 173Q set aside. In conclusion, the impugned order against appellant nos. 2 and 3 was set aside, with their appeals accepted. The duty demand against the company for a specific period was confirmed, and penalties were revoked. The company's appeal was partly allowed with appropriate relief as per the law.
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