1997 (6) TMI 223 - AT - Central Excise

Summary

Issues involved:
1. Alleged clandestine removal of detergent powder without payment of duty.
2. Burden of proof on the Department to establish clandestine removal.
3. Nature of despatches reflected in the "Material Outgoing Slips."
4. Weight calculation of detergent powder bags cleared by the appellants.
5. Limitation period for issuing the show cause notice.

Detailed Analysis:

Issue 1: Alleged clandestine removal of detergent powder without payment of duty
The case revolved around the appellant company's alleged clandestine removal of detergent powder to M/s. H.K. Industries without payment of duty. The Department proposed a duty demand of Rs. 4,60,971.00 based on the despatches reflected in the "Material Outgoing Slips."

Issue 2: Burden of proof on the Department to establish clandestine removal
The appellant argued that the Department failed to produce sufficient legal evidence to establish the clandestine removal beyond doubt. The burden of proof was emphasized, and the appellant contended that the Department did not discharge its burden adequately.

Issue 3: Nature of despatches reflected in the "Material Outgoing Slips"
The appellant claimed that the despatches shown in the "Material Outgoing Slips" were of semi-finished detergent powder sent to M/s. H.K. Industries for seiving/screening during machinery breakdowns. However, the Department countered that there was no indication in the slips to support the claim that the goods were semi-finished.

Issue 4: Weight calculation of detergent powder bags cleared by the appellants
The appellants challenged the weight calculation of the detergent powder bags, arguing that there was no evidence to show that the bags were of 50 kgs each. The adjudicating authority justified the weight calculation based on the absence of contrary evidence from the appellants.

Issue 5: Limitation period for issuing the show cause notice
The appellants contended that the demand was barred by the limitation of six months as the show cause notice was issued after the expiry of the prescribed period. However, the Tribunal rejected this plea citing precedents and upheld the demand for duty.

In conclusion, the Tribunal rejected the appeal, confirming the duty demand of Rs. 4,60,971.00. The personal penalty imposed on the appellants was reduced from Rs. 2.00 lakh to Rs. 1.00 lakh. The judgment emphasized the importance of maintaining proper records and meeting the burden of proof in cases of alleged clandestine removal to avoid adverse legal consequences.