1995 (1) TMI 147 - AT - Central Excise

Summary

Issues Involved:
1. Non-maintenance of statutory records.
2. Alleged suppression of production and clandestine removal of goods.
3. Demand of duty based on estimated production.
4. Imposition of penalty.

Summary:

1. Non-maintenance of statutory records:
The Tribunal observed that the RG-I register and raw materials account were not maintained from 26-5-1984 to 4-6-1984. The explanation provided by the appellants was not convincing, thus proving the allegation of non-maintenance of records.

2. Alleged suppression of production and clandestine removal of goods:
The Department alleged suppression of production and removal of goods without payment of duty based on an experiment correlating power consumption with production. The appellants contended that such estimation was based on incorrect assumptions and cited various case laws to support their argument. The Tribunal noted that while irregularities in record maintenance were evident, there was no substantive evidence of clandestine removal, such as seizure of goods or private records indicating such removal.

3. Demand of duty based on estimated production:
The Tribunal examined the reliance on power consumption for estimating production and referred to the Supreme Court's decision in Containers Corporation v. CEGAT, which highlighted the difficulty in correlating power consumption with production. The Tribunal concluded that without documentary proof of removal of goods without payment of duty, the demand based on estimated production could not be confirmed.

4. Imposition of penalty:
Given the proven non-maintenance of records and the serious nature of the allegations, the Tribunal upheld the imposition of a penalty of Rs. 10,000/- on the appellants. The quantum of the penalty was deemed reasonable considering the circumstances.

Conclusion:
The Tribunal modified the impugned order by setting aside the demand of duty based on estimated production due to lack of evidence of clandestine removal. However, the penalty for incorrect maintenance of records was upheld, and the appeal was disposed of accordingly.