2002 (9) TMI 182 - AT - Central Excise

Summary

Issues involved:
The judgment involves the imposition of penalties under Rule 209A of the Central Excise Rules on appellants for alleged evasion of duty on clandestinely removed polyester yarn.

Details of the Judgment:

Issue 1: Allegations and Denials
The appellants were accused of receiving non-duty paid polyester yarn from M/s. HPL and clandestinely removing manufactured yarn without paying excise duty. The Commissioner imposed penalties, which the appellants contested, denying receipt of non-duty paid yarn, manufacturing yarn without entry or duty payment, and involvement of certain appellants in day-to-day affairs.

Issue 2: Challenge to Evidence
The counsel challenged the order based on insufficient evidence, including statements of witnesses and uncorroborated entries in documents. The argument emphasized the lack of cross-examination of a key witness, casting doubt on the proof of non-duty paid yarn receipt.

Issue 3: Lack of Corroboration
The judgment highlighted the failure to corroborate evidence from witnesses regarding the clandestine sale of polyester yarn without duty payment. The absence of tangible evidence, such as invoices or gate passes, weakened the case against the appellants.

Issue 4: Legal Precedents
Legal precedents were cited to emphasize the need for tangible evidence in excise cases. The judgment referenced cases where assumptions and presumptions without substantial proof were deemed insufficient to establish allegations of clandestine removal of goods.

Conclusion:
Based on the lack of concrete evidence and inconsistencies in witness statements, the Tribunal set aside the Commissioner's order, citing a previous binding judgment on similar facts. The appellants' appeals were accepted, and the penalties under Rule 209A were deemed legally unsustainable.