1997 (12) TMI 265 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty.
2. Calculation of duty based on formula for sweetened aerated waters (SAW).
3. Allegation of suppression of production and clearance of SAW.
4. Consideration of evidence and presumption in determining duty liability.
5. Imposition of penalty and burden of proof.
6. Request for out-of-turn hearing due to multiple pending notices and appeals.

Analysis:
1. The application before the Appellate Tribunal sought a waiver of pre-deposit of duty amounting to Rs. 67.00 lacs and penalty of Rs. 1.00 crore imposed on the appellant. The duty was demanded based on the manufacturing and clearance of sweetened aerated waters (SAW) without payment from April 1989 to January 1994. The appellant argued that the duty calculation was done using a formula provided by another manufacturer, which was a rough guide and not strictly applicable due to various factors like production leakages. The appellant denied any clandestine removal of goods and highlighted the lack of evidence supporting the duty demand solely on the basis of one raw material. The appellant also emphasized compliance with norms and lack of suppression of facts, citing a previous Tribunal decision where duty was waived under different circumstances.

2. The Departmental Representative countered by asserting that the appellant's prior use of the formula for claiming duty set off indicated its workability, despite the appellant's alleged non-compliance with the formula during production. The Department argued that the appellant's failure to disclose the deviation from the formula amounted to suppression of production and clearance of SAW. The Department highlighted the Production Manager's statement regarding adherence to the formula and referenced losses recorded in the appellant's register forms as evidence against granting a stay on duty and penalty recovery.

3. In reviewing the Commissioner's order, the Tribunal noted the reliance on the formula as the primary basis for determining non-compliance with duty requirements. The Tribunal questioned the presumption made by the Commissioner regarding shortfalls in production and emphasized the lack of concrete evidence supporting clandestine removal of goods. The Tribunal stressed the Department's burden to establish clandestine removal and the insufficiency of a mere shortage of finished product calculated based on a formula without corroborating evidence. The Tribunal found no prima facie basis for imposing a penalty and thus dispensed with the deposit of duty and penalty, staying the recovery process.

4. Additionally, considering the multiple pending notices and appeals related to the issue at hand, the Tribunal deemed it appropriate for an out-of-turn hearing, directing the listing of the appeal for a specific date in February 1998 along with another related appeal. This decision was based on the complexity and recurrence of the issue, warranting expedited adjudication.