1984 (2) TMI 242 - AT - Central Excise

Summary

Issues:
1. Discrepancy in weight records for excisable paper.
2. Alleged duty evasion by the company.
3. Short levy of duty by the company.

Detailed Analysis:

1. Discrepancy in weight records for excisable paper:
The dispute arose when officers of the Central Excise found discrepancies in the weighment sheets and records of production of paper from April-July 1971. The company's method involved accepting nominal weight for Central Excise if the variation between nominal and actual weight was within certain limits. However, further investigations revealed discrepancies between gate passes weight, challan weight, and invoice weight. The company's representatives explained that gate passes and challans were prepared by two sets of clerks, and the weight in the invoice was determined based on the challan weight.

2. Alleged duty evasion by the company:
The Central Excise officers charged the company with evading duty amounting to Rs. 60,119.72 on excisable paper removed during a specific period. The Collector held the company responsible for paying duty based on nominal weight while charging customers based on actual weight, resulting in a loss of duty to the government. The company argued that their practice was standard in the paper industry, but the authorities found discrepancies in the charged weight, duty paid, and weight cleared under gate passes.

3. Short levy of duty by the company:
The core issue revolved around whether there was a short levy of duty when the company sold paper at weights exceeding nominal weight to customers but paid duty to Central Excise based on nominal weight. The company contended that they accounted for paper accurately in their records and removed consignments under gate passes. However, the authorities highlighted discrepancies between the weight shown in challans, bills, and gate passes, indicating a clear mismatch in the weight charged to customers and the weight cleared under gate passes.

In conclusion, the Appellate Tribunal dismissed the appeal, upholding the department's charge of duty evasion by the company. The Tribunal found that the company charged customers based on actual weights exceeding nominal weight but paid duty to the government based on nominal weight, leading to a clear short levy of duty. The Tribunal deemed the penalty imposed on the company as justified, considering the deliberate actions taken by the company resulting in duty loss.