1996 (7) TMI 354 - AT - Central Excise

Summary

Issues: Duty demand based on discrepancies in production figures and invoices, evidence from bank statements, plea of excess figures for obtaining loans, lack of corroborative evidence, penalty imposition for alleged duty evasion.

In this judgment by the Appellate Tribunal CEGAT, MADRAS, three appeals were consolidated due to a common issue regarding duty demand concerning discrepancies in production figures and invoices. The appellants were required to pay duty for goods exceeding the quantity reflected in the RG 1 account, based on evidence from a statement and bank officials' verification. The appellants argued that they inflated figures to secure loans and advances, emphasizing the absence of concrete evidence supporting clandestine removal of goods or excess sales. They contended that annual stocktaking did not reveal discrepancies and that the bank figures should not solely dictate duty demands, seeking the benefit of the doubt.

The department, represented by the DR, relied on the appellants' documents and bank confirmation of production figures to assert duty evasion and penalty liability. After considering both parties' arguments, the Tribunal noted the bank's verification of production figures and the issuance of additional invoices by the appellants. The Tribunal emphasized that the bank's verification should not be disregarded, especially when supported by the appellants' records. Despite discrepancies between bank and RG 1 figures, the existence of sales records undermined the appellants' plea, leading to upholding the duty demand. However, considering the circumstances, the Tribunal reduced the penalties imposed on the company and the Managing Director to Rs. 2,000 each, while absolving the Manager of penalties due to the benefit of doubt.

In conclusion, the Tribunal upheld the duty demand based on discrepancies in production figures and invoices, supported by bank statements and appellants' records. The judgment highlighted the significance of corroborative evidence in duty evasion cases and balanced penalty imposition based on the quantum of duty involved. The decision exemplified the importance of maintaining accurate records and the consequences of discrepancies in financial dealings subject to duty obligations.