2004 (5) TMI 122 - AT - Central Excise

Summary

Issues:
- Confirmation of demand invoking larger period under Section 11A of the Act
- Imposition of penalties under Section 173Q(I) and 226
- Personal penalties on Managing Director, Vice President, and Deputy Manager
- Allegation of excess production and removal of goods clandestinely
- Discrepancies in entries between private records and RG-1 register
- Lack of evidence on excess production and clandestine removal
- Non-accountal of excess quantity of production
- Consideration of various judgments by the appellants
- Lack of investigation into acquisition of raw materials and clearance without duty payment
- Lack of investigation on excess consumption of electricity
- Lack of statements from responsible officers and purchasers
- Lack of seizure of goods and statements from transporters

Detailed Analysis:

The judgment pertains to stay applications arising from a common Order-in-Original passed by the Commissioner of Central Excise, confirming a demand of Rs. 2,17,89,099 and imposing penalties under Section 173Q(I) and 226. The order also included personal penalties on the Managing Director and other officers. The appellants sought waiver of the pre-deposit, contesting the allegation of excess production and clandestine removal of goods, based on discrepancies between private records and the RG-1 register. They argued that previous show cause notices had been dropped after verification and highlighted the lack of evidence supporting the current allegations.

The appellants emphasized that the Department initiated proceedings based solely on discrepancies in private records without investigating the procurement of raw materials or clandestine removal of goods. The Senior Counsel pointed out the absence of evidence on excess production and clandestine activities, such as higher electricity consumption or acquisition of inputs without duty payment. The lack of reference to case law cited by the appellants was also highlighted, questioning the basis of the Commissioner's findings.

The JCDR supported the Commissioner's detailed findings on non-accountal of excess production and clearances without duty payment, referencing discrepancies in records and clearances made by a sister unit. The Commissioner's conclusion on excess production and clearances was deemed clear and unexplained discrepancies were noted as crucial in the decision-making process.

Upon careful consideration of the records, the Tribunal observed the lack of investigation into key aspects such as raw material procurement, electricity consumption, and statements from responsible officers and purchasers. The absence of evidence on manufacturing or clandestine removal of goods led to the acceptance of the appellants' plea for waiver of pre-deposit, allowing the stay applications and halting recovery during the appeal process. The need for expeditious hearing of the appeals was emphasized, with a final hearing scheduled for a specific date.