2005 (5) TMI 139 - AT - Central Excise

Summary

Issues involved: Appeal against Adjudication Order u/s 11A(1) of Central Excise Act for alleged removal of tyres without duty payment.

Summary:
The Adjudication Order was challenged based on discrepancies between Balance Sheets and Central Excise records, where 22,017 tyres were allegedly removed without duty payment. The Adjudicating authority confirmed duty amount u/r 9(2) of C.E. Rules, 1944 and imposed penalties u/s 11AC and Rule 173Q. The appellant contended that higher figures in Balance Sheets were for financial support, not clandestine removal. The Manager (Finance) explained discrepancies due to issuing invoices before sales. Case laws were cited supporting burden of proof on Revenue for clandestine clearance.

The Revenue relied on the Managing Director's acceptance of Balance Sheet figures and cited case laws to support their position. Upon review, the Tribunal found the Manager (Finance)'s explanation credible, stating Central Excise figures accurately reflected production and removal. Despite suspicions from irregular record-keeping, the Tribunal noted lack of corroborative evidence for clandestine removal of 22,000 tyres. The failure to identify purchasers of the tyres and the appellant unit's status as a sick unit further weakened the Revenue's case. Citing case laws favoring the appellant, the Tribunal set aside the Adjudication Order and allowed the appeal.