2002 (11) TMI 149 - AT - Central Excise

Summary

Issues Involved:
1. Demand of duty under Proviso to Section 3(1) of the Central Excise Act, 1944.
2. Demand based on differential quantity and salvage recoverable areas.
3. Demand based on date-wise, customer-wise, and variety-wise despatch statements.
4. Demand based on a single document indicating local despatch.
5. Demand based on shortage found during stock verification.
6. Consideration of limitation plea.
7. Imposition of penalties and confiscation of goods.

Summary:

1. Demand of duty under Proviso to Section 3(1) of the Central Excise Act, 1944:
The demand was made by applying a rate of Rs. 50/- on the differential quantity, alleging unaccounted clearance of polished granite slabs to the Domestic Tariff Area (D.T.A.) without permission. The Tribunal found that the levy of Central Excise duty under the first proviso to Section 3(1) would apply only when goods are allowed to be sold in India. Since there was no permission for sale in D.T.A., no duty could be demanded.

2. Demand based on differential quantity and salvage recoverable areas:
The appellants argued that the figures in the statements indicated gross areas, not salvage recoverable areas, and payments were received based on salvage recoverable areas. The Tribunal concluded that in the absence of evidence of extra realisation, the total monetary realisation should be considered for the complete area, including the unretrievable area. Therefore, no differential duty was liable.

3. Demand based on date-wise, customer-wise, and variety-wise despatch statements:
The Department alleged that different quantities were sent to customers as indicated in Annexure-VIII while duty was discharged on lesser quantities. The Tribunal found that in the absence of evidence of extra payments, the actual realisation should be construed as for the total quantity delivered, and no further duty was demandable.

4. Demand based on a single document indicating local despatch:
The demand of Rs. 8,62,617/- was based on a single document. The Tribunal held that a conclusion of clandestine removal could not be based on a single unexamined document, and several precedents supported this view.

5. Demand based on shortage found during stock verification:
The demand of Rs. 12,12,211/- was based on a comparison with the RG 1 register, which EOUs are not required to maintain. The Tribunal found that shortages based on RG 1 could not be upheld, and there was no evidence of illegal removal. Therefore, the demand and confiscation could not be sustained.

6. Consideration of limitation plea:
The Tribunal noted that the Commissioner's order did not consider the plea of limitation, and no specific ground on limitation was made in the appeal. Therefore, no findings were made on this ground.

7. Imposition of penalties and confiscation of goods:
Since no excess area was proved to have been removed, and no evidence of additional payments was found, the Tribunal did not uphold the demands. Consequently, no penalties or confiscation were justified, and the redemption fine was set aside.

Conclusion:
The order was set aside, and the appeal was allowed.