1997 (10) TMI 206 - AT - Central Excise

Summary

Issues:
1. Duty demand, penalty, and redemption fine imposed by the Collector of Central Excise, Kanpur.
2. Allegations of attempted clandestine removal of footwear soles.
3. Reliance on private records for establishing clandestine removal.
4. Authenticity of private diary entries and their admissibility as evidence.
5. Adequacy of evidence provided by the Department to prove clandestine removal.

Detailed Analysis:

1. The appellants challenged the order-in-original by the Collector of Central Excise, Kanpur, demanding a duty of Rs. 7,69,237, a penalty of Rs. 2,50,000, and a redemption fine of Rs. 75,000. The Collector's order was based on allegations of attempted clandestine removal of footwear soles by the appellants, who were engaged in manufacturing footwear soles falling under Chapter Heading 6401.91 of the Central Excise Tariff Act.

2. Central Excise Officers visited the factory premises of the appellants based on an intelligence report and found discrepancies in the entries in the RG 1 Register. A Show Cause Notice was issued, alleging clandestine removal and clearance of footwear soles without proper documentation. The appellants defended by claiming substandard products and accounting errors. The Collector found discrepancies in the production and clearance records, concluding that the appellants had indeed removed goods without proper duty payment.

3. The appellants argued against the reliance on private records for establishing clandestine removal. However, the Tribunal noted that the authenticity of the private diary entries was not disputed by the appellants. The Tribunal referred to previous judgments and held that when private records are not disowned by the assessee, the Department must prove the reliability of the entries through further verification.

4. The appellants contended that the private diary entries were inadmissible as evidence and were not authenticated or verified by responsible persons. They also claimed that the inspection and seizure of records were based on minor discrepancies. The Tribunal, however, found that the appellants failed to provide adequate evidence to contradict the findings in the impugned order regarding the non-entry of certain footwear soles in the statutory records.

5. Despite the appellants' submission of certain documents as evidence of proper accounting and duty payment, the Tribunal found these documents to be unauthenticated and one-sided. The Tribunal noted that there was no request for remand to examine these documents further. Consequently, the Tribunal upheld the impugned order, confirming the duty demand, penalty, and redemption fine imposed by the Collector.

In conclusion, the Tribunal rejected the appeal and upheld the Collector's order, emphasizing the appellants' failure to provide sufficient evidence to counter the allegations of clandestine removal and duty evasion.