1993 (2) TMI 178 - AT - Central Excise

Summary

Issues:
1. Duty demand on clandestine manufacturing and removal of tread rubber
2. Imposition of penalty and confiscation of plant and machinery
3. Reliance on statement of proprietor for excess production charges
4. Lack of detailed findings on raw materials usage and rubber production
5. Allegations of unaccounted raw materials and lack of evidence
6. Failure to consider variation in sulphur usage for tread rubber production
7. Inadequate examination of the issue by the lower authority

Analysis:
1. The appeal challenged the duty demand of Rs. 5,47,297.85 on the alleged clandestine manufacturing and removal of tread rubber, along with a penalty of Rs. 50,000 and confiscation of plant and machinery. The lower authority relied heavily on the statement of the proprietor regarding sulphur usage for rubber production.

2. The appellant's consultant argued that the lower authority's reliance on the proprietor's statement was flawed as it was an approximation, and there was no fixed formula for sulphur usage in tread rubber production. The appellant contended that other raw materials and technical literature were not considered, and the order was based on presumptions.

3. The Department's representative supported the lower authority's decision, emphasizing that the proprietor did not retract his statement. However, the Tribunal noted discrepancies in the lower authority's findings regarding raw materials usage and rubber production.

4. The Tribunal observed that the lower authority failed to provide detailed findings on the total quantum of raw materials used and tread rubber produced. The decision was solely based on sulphur usage, neglecting other specified raw materials and the absence of evidence of excess unaccounted raw materials.

5. There were no allegations or evidence of unaccounted raw material purchases or unauthorized removal of tread rubber without proper documentation. The lower authority's failure to consider variations in sulphur usage and lack of examination on the feasibility of rubber production with different sulphur quantities were highlighted.

6. In conclusion, the Tribunal held that the lower authority did not conduct a thorough examination of the issue. The order was deemed improper, and the matter was remanded for re-adjudication, providing the appellant with an opportunity to present their case based on the Tribunal's observations. As a result, the appeal was allowed by remand.