2005 (10) TMI 133 - AT - Central Excise

Summary

Issues:
1. Duty demands on goods interrupted during transportation and confirmed duty demands on seized goods.
2. Imposition of fine on seized goods cleared on payment of fine and duty.
3. Confirmation of demands on kutcha slips recovered from factory premises for a specific period.
4. Imposition of penalties under Section 11AC and Rule 173Q(1) on various parties.
5. Seizure of land, building, plant, and machinery under Rule 173Q(1) and redemption fine imposition.
6. Contestation of demands based on kutcha slips and imposition of penalties.

Analysis:
1. The appeals arose from duty demands on goods interrupted during transportation and confirmed duty demands on seized goods. The Commissioner imposed fines on the seized goods cleared upon payment of fine and duty. The challenge in the appeals was regarding the confirmation of demands on kutcha slips recovered from the factory premises for a specific period. The Commissioner concluded that the goods were manufactured based on these kutcha slips and cleared without payment of duty clandestinely.

2. The Commissioner imposed penalties under Section 11AC and Rule 173Q(1) on various parties, including partners and proprietors of textile firms and the vehicle owner from which the goods were seized. Additionally, the land, building, plant, and machinery of the appellants were seized under Rule 173Q(1), and a redemption fine was imposed.

3. The hearing involved arguments from both sides. The Counsel contended that demands could not be confirmed solely based on kutcha slips, citing lack of direct evidence and failure to investigate various aspects like purchase of inputs and flow back of funds. The Counsel referenced several judgments to support their position. The Department justified the demands based on the seized kutcha slips from the factory premises.

4. The Tribunal noted that the investigation revealed unaccounted quantities of goods in the factory premises based on kutcha slips. However, there was no signature on these slips, and no corroboration regarding inputs, production, or sales. The Tribunal emphasized the lack of corroborative evidence to confirm the demands solely on the basis of kutcha slips. The demands were set aside, and penalties were reduced or set aside for various parties based on the findings.

5. The Tribunal upheld the confiscation of land, building, etc., and allowed redemption upon payment of a fine. The impugned order was modified based on the Tribunal's findings and disposed of accordingly. The operative portion of the order was pronounced in open court at the conclusion of the hearing.