2005 (3) TMI 221 - AT - Central Excise

Summary

Issues:
1. Appeal filed by M/s. Prince Gutka Ltd. & Ors. allowed by Tribunal, remanded by Supreme Court for joint decision on appeals by assessee and Revenue.
2. Show cause notice issued for duty evasion by M/s. Prince Gutka Ltd., demand raised, part dropped by Commissioner, penalties imposed.
3. Revenue officers found documents indicating duty evasion during search at premises of M/s. Prince Gutka Ltd. and distributor.
4. Appellants argue documents relied upon by Revenue were recovered from distributor's premises, no evidence from manufacturer's premises.
5. Appellants claim no investigation conducted at manufacturer's unit, no evidence discussed for under valuation demand.
6. Appellants challenge lack of finding on demand confirmation, contradictory approach by adjudicating authority.
7. Legal contentions on standard of proof for clandestine removal charges, reliance on case law for evidence requirements.
8. Revenue's contention based on distributor's admission of receiving excisable goods from manufacturer.

Analysis:
1. The Tribunal allowed the appeals filed by M/s. Prince Gutka Ltd. & Ors., remanded by the Supreme Court for a joint decision on appeals by both the assessee and the Revenue. The matter was taken up for hearing in compliance with the Supreme Court's order.

2. A show cause notice was issued to M/s. Prince Gutka Ltd. for alleged duty evasion, with a demand raised for clandestine removal and under-valuation of goods. The Commissioner dropped a significant portion of the demand but confirmed duty on clandestine removal and under-valuation, imposing personal penalties. Appeals were filed by both parties against the adjudication order.

3. Revenue officers found documents during a search indicating duty evasion at the premises of M/s. Prince Gutka Ltd. and their distributor, leading to investigations and recovery of records seized by the Income Tax Department.

4. The appellants argued that the documents relied upon by the Revenue were recovered from the distributor's premises, with no similar evidence found at the manufacturer's premises. They highlighted that certain records were in abbreviation form, and explanations provided during cross-examination indicated non-excisable goods.

5. The appellants contended that no investigation was conducted at the manufacturer's unit, and no evidence was presented to support the under-valuation demand. They raised concerns about the sustainability of the demand without proper evidence.

6. Challenges were raised regarding the lack of findings on the confirmation of demands, with contradictory approaches noted in the adjudication order. The appellants questioned the sustainability of the demand without substantial evidence.

7. Legal contentions focused on the standard of proof required for clandestine removal charges, citing relevant case law on evidence requirements and the necessity of positive evidence to sustain such charges.

8. The Revenue's position was based on the distributor's admission of receiving excisable goods from the manufacturer, emphasizing the findings of the adjudication order.