1988 (8) TMI 238 - AT - Central Excise

Summary

Issues:
- Duty and penalty imposed on the appellant for alleged clandestine removal of excisable goods.
- Dispute regarding the basis of show cause notice and subsequent order.
- Finalization of RT 12 assessments and its impact on the case.
- Legality of the imposition of penalty and duty.
- Authority to verify the genuineness of documents and entries.

Analysis:
The appeal before the Appellate Tribunal CEGAT, CALCUTTA challenged an order imposing duty and penalty on the appellant for alleged clandestine removal of excisable goods. The appellant, engaged in manufacturing metal containers, was accused of undervaluation and suppression of documents related to the cost of metal sheets used. The appellant argued that the show cause notice was based on undervaluation, not clandestine removal, and highlighted the finalization of RT 12 assessments until June 1983, questioning the legal basis of the notice issued in February 1985. The department acknowledged the finalization of assessments until July 1981 and June 1983, leading to a debate on the premature nature of the order based on provisional assessments.

The Tribunal, after considering the submissions, focused on a crucial legal point. It noted that duty was levied for a period already covered by finalized RT 12 assessments, raising doubts about the necessity of penalty imposition. The Tribunal questioned the validity of issuing a show cause notice before finalizing assessments, emphasizing the lack of explanation from the department on this matter. Additionally, the Tribunal addressed the issue of the reconciliation statement not being signed by an authorized officer, suggesting that verification of document genuineness was essential, which was not adequately conducted by the adjudicating authority.

Consequently, the Tribunal found the impugned order legally unsustainable and set it aside, allowing the appeal. It clarified that both the department and the appellant had the right to take appropriate legal actions regarding under-valuation and removal of goods. The Tribunal emphasized the need for proper verification of documents and entries in such cases. The appellants were granted consequential relief as per the order, with the judgment announced on 8th August 1988.