2007 (2) TMI 292 - HC - Central Excise

Misplacement of records by department- Respondent-Company is engaged in the manufacture of cement and is covered by the Central Excise Tariff Act, 1985. The department issued a show cause notice. In the show cause notice, the department made reference to the Dip Register for the purpose of suppression of material facts on the part of the Company. The department also considered the said suppression of facts for the purpose of extended limitation in terms of Section 11-A of the Central Excise Act (for short the Act ). After receipt of notice, the respondent submitted a detailed reply denying the allegations made against the Company. Matter was heard. The then Commissioner passed an adverse order relying on the Dip Register for the purpose of suppression and for the suppression of the case on the merits of the matter. An adverse order was passed confirming the show cause notice. Matter was taken to the Tribunal by the assessee. The Tribunal, after hearing has chosen to remand the matter for reconsideration with a further direction to make available the Dip Register to the assessee for the purpose of the say of the assessee in the case on hand. Thereafter, the department did not make available the said Register. But however heard the respondent-Company and once again confirmed the earlier demand. Aggrieved by the same, the assessee went for appeal for the second time before the Tribunal and the Tribunal has accepted the case of the assessee. It is in these circumstances, the revenue is before us. Held that- . The department has to be careful in maintaining the register as otherwise, there is every chance of public money being lost on account of negligence on the part of the department. The department cannot shirk its responsibility on the ground of mis-placement of the same during the course of shifting of the office building. Appeal stands rejected.

Summary

Issues:
- Allegations of suppression of material facts by the Company in the Central Excise matter.
- Dispute over the availability and non-production of the Silo Dip Register.
- Tribunal's decision to remand the matter for reconsideration.
- Commissioner's adverse order despite non-production of the Dip Register.

Analysis:
1. The case involved allegations of suppression of material facts by the Company in the Central Excise matter. The respondent-Company, engaged in cement manufacturing, was accused of not accounting for the entire quantity of cement manufactured and clearing the unaccounted portion without issuing invoices or paying duty. The Department issued a show cause notice based on discrepancies in the Dip Register, leading to extended limitation under Section 11-A of the Central Excise Act.

2. The Tribunal initially remanded the matter for reconsideration, directing the Department to make available the crucial Silo Dip Register to the assessee. Despite the order, the Department failed to produce the register in subsequent proceedings, leading to a second appeal by the assessee. The Tribunal accepted the case of the assessee based on the non-production of the register, which was deemed essential for adjudication.

3. The Commissioner, in subsequent proceedings, acknowledged the importance of the Silo Dip Register but proceeded with the adjudication based on other available records due to its unavailability. The Tribunal upheld the assessee's position, emphasizing the significance of the missing register in determining the merits of the case and the extended period of limitation. The Tribunal's decision was based on factual considerations and the Department's failure to comply with the order to produce the register.

4. The High Court, upon review, found no infirmity in the Tribunal's decision. It emphasized the critical role of accurate record-keeping in excise cases to safeguard public revenue. The Court highlighted the Department's responsibility in maintaining essential registers and cautioned against negligence that could result in revenue loss. The Court upheld the Tribunal's decision, emphasizing the factual basis of the order and the Department's failure to produce the necessary register.

5. The Court ultimately rejected the appeal, emphasizing the importance of proper record maintenance in excise matters and the Department's duty to ensure the preservation of essential documents for adjudication. The judgment highlighted the significance of factual considerations in such cases and the need for strict compliance with tribunal orders for a fair resolution.