1992 (10) TMI 164 - AT - Central Excise

Summary

Issues:
Dispensation of pre-deposit of duty and penalty demanded in the impugned order.

Analysis:
The applicants sought dispensation of pre-deposit of duty and penalty totaling Rs. 80,263.37 and Rs. 16,000/-, respectively, demanded in the impugned order. The duty was initially demanded at Rs. 32,98,758.90 for allegedly manufacturing tread rubber and clearing it without paying duty by under-declaring its value. The adjudication proceedings were delayed due to legal challenges questioning the competence of the Collector. The new Collector sought to continue the adjudication process, leading to the applicants submitting their reply to the show cause notice and requesting cross-examination of relevant parties. The Collector ultimately calculated the duty based on sulphur consumption, exempting the applicants for one year but holding them liable for duty for subsequent years. The applicants, citing financial hardship, offered to make a pre-deposit of Rs. 10,000. The Tribunal, considering the financial situation and closure of the unit, ordered a pre-deposit of Rs. 30,000 by a specified date, dispensing with the remaining amount pending appeal.

The Tribunal noted that a wide-ranging enquiry had been conducted, including statements from various individuals related to the applicants' operations. The evidence included details on production processes, sales without bills, and discrepancies in production accounting. The lower authority had primarily relied on sulphur consumption to calculate the duty liability, despite other evidence suggesting potential evasion. The Tribunal criticized the lower authority for not considering the totality of evidence, emphasizing the need to examine all materials indicative of duty evasion. It highlighted the importance of assessing all evidence before drawing conclusions on duty liability, especially in cases involving significant allegations of evasion. The Tribunal expressed regret over the lower authority's narrow focus on sulphur consumption and inability to rectify the situation due to legal constraints, suggesting that the Departmental authorities should consider appropriate remedial actions based on the available evidence and legal provisions.

In conclusion, the Tribunal ordered a partial dispensation of the pre-deposit amount, considering the financial hardship faced by the applicants and the closure of their unit. The judgment highlighted the necessity of a comprehensive evaluation of all evidence in duty evasion cases and criticized the lower authority for its limited focus on a single aspect of evidence. The Tribunal underscored the importance of considering all relevant evidence before determining duty liability in cases involving substantial allegations of evasion.