1993 (2) TMI 182 - AT - Central Excise

Issues Involved:

1. Confiscation of 9,60,000 biris and appropriation of Rs. 11,614.40 towards value and Rs. 3,585.60 towards Central Excise Duty.
2. Payment of Central Excise Duty of Rs. 6,12,225.23 on 16,39,15,725 biris alleged to be clandestinely removed.
3. Imposition of a penalty of Rs. 2,000.00.

Issue-wise Detailed Analysis:

1. Confiscation of 9,60,000 Biris and Appropriation of Rs. 11,614.40 Towards Value and Rs. 3,585.60 Towards Central Excise Duty:

The Tribunal examined whether the appellants could produce any valid documentary evidence to show that the seized biris were duty-paid. The appellants contended that the biris sent to Nowgaon, Assam, were mostly damaged or rejected and were sent there after reprocessing. Registers showing the receipt of damaged/rejected biris from dealers were produced before the Collector but were not taken into account. The Tribunal noted that the production of a register showing only a small quantity of biris was insufficient to prove that all the seized biris were damaged ones. Consequently, the burden of proof was on the appellants, which they failed to discharge. The Tribunal upheld the confiscation and appropriation of the amounts, noting that the balance quantity of biris after confiscation would be 16,39,15,725.

2. Payment of Central Excise Duty of Rs. 6,12,225.23 on 16,39,15,725 Biris Alleged to be Clandestinely Removed:

The Tribunal considered the appellants' contention that the statement of Taj Mohammed could not be relied upon and that the documents seized should not be used against them. The Tribunal noted that the Adjudicating Authority had based its findings on incriminating documents rather than Taj Mohammed's statement. The total quantity of biris, as per the annexures to the show cause notice, was 16,48,75,725, and after deducting the confiscated biris, the balance was 16,39,15,725.

The appellants argued that 10,27,27,794 biris related to the period before 1-3-1979 when unbranded biris were exempt from duty. The Tribunal observed that the onus to prove duty-liability lies on the Department, and since the Department did not produce evidence to show that these biris were branded, the benefit of doubt should go to the appellants. Hence, the demand for duty on 10,27,27,794 biris was set aside.

Regarding the remaining 6,04,67,931 biris, the Tribunal noted that even if Taj Mohammed's statement was disregarded, the documents seized could still be relied upon. The appellants' claim that the biris sent to Nowgaon were mostly damaged was not substantiated with sufficient proof. The Tribunal concluded that there was no material to show that this quantity of biris was duty-paid and confirmed the demand for duty on 6,04,67,931 biris, amounting to Rs. 2,25,237.65.

3. Imposition of a Penalty of Rs. 2,000.00:

Given the Tribunal's conclusion that there was clandestine removal of 6,04,67,931 biris, the imposition of a penalty under Rule 9(2) of the Central Excise Rules, 1944, was deemed appropriate. The penalty of Rs. 2,000.00 was upheld as not excessive.

Conclusion:

The appeal was disposed of with the following determinations:
- The confiscation of 9,60,000 biris and the appropriation of Rs. 11,614.40 towards value and Rs. 3,585.60 towards Central Excise Duty were upheld.
- The demand for duty on 10,27,27,794 biris was set aside, but the demand for duty on 6,04,67,931 biris was confirmed, amounting to Rs. 2,25,237.65.
- The penalty of Rs. 2,000.00 was upheld.

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