2002 (7) TMI 196 - AT - Central Excise

Summary

Issues:
Appeals against common order dated 17-8-2000 passed by the Commissioner of Central Excise (Appeals), Jaipur regarding the manufacture of chewing tobacco under Chapter Heading 2404.40 of the Schedule to the Central Excise Tariff Act, 1985.

Detailed Analysis:

1. Non-entry of goods in RG1 register:
The appellants were found to have not entered the goods manufactured on 2nd and 3rd December, 97 in the RG1 register due to the illness of the appellant's daughter. The balance in stock as per the register on 1-12-97 did not match the physical verification. The appellant contended that the lapses were not deliberate and provided a plausible explanation supported by a voluntary statement. The impugned order was criticized for not considering the circumstances leading to the lapses and for assuming clandestine clearances without concrete proof. The appellant argued for leniency based on extenuating circumstances and cited precedents supporting the allowance of shrinkage and the requirement of strict proof of mens rea for imposing penalties.

2. Allegations of habitual offense and lack of positive evidence:
The Revenue contended that the appellant was a habitual offender and had never claimed any shortage. However, the appellant's explanation regarding the shortage was supported by the circumstances of the case and legal precedents. The Revenue failed to provide positive evidence to substantiate the allegations of clandestine clearances. The case was found to be covered by previous decisions, and the impugned order was set aside due to the lack of concrete evidence against the appellants.

In conclusion, the Appellate Tribunal CEGAT, New Delhi allowed both appeals against the common order dated 17-8-2000 passed by the Commissioner of Central Excise (Appeals), Jaipur. The decision was based on the failure of the Revenue to provide positive evidence to support the allegations of clandestine clearances and the appellant's plausible explanation for the lapses in maintaining records. The tribunal emphasized the importance of considering extenuating circumstances and the requirement of strict proof of mens rea before imposing penalties.