1997 (12) TMI 389 - AT - Central Excise

Summary

Issues:
- Duty demand and penalty imposed by the Commissioner of Central Excise, Jaipur challenged in the appeal.
- Allegation of clandestine manufacture of polyethylene film without accounting for it in statutory records.
- Discrepancy in the calculation of alleged excess production not accounted for in statutory registers.
- Lack of proper evidence and worksheet to support the quantity of alleged excess production.

Analysis:
The appeal before the Appellate Tribunal challenged the Order passed by the Commissioner of Central Excise, Jaipur, confirming a duty demand of Rs. 2,16,410/- and imposing a penalty of Rs. 25,000. The Commissioner's decision was based on the allegation that the appellant had clandestinely manufactured a quantity of polyethylene film without proper accounting or payment of duty. The appellant's representative argued that the department's case relied heavily on a private non-statutory note book maintained by a worker in charge of the extruding machine. It was contended that the show cause notice lacked a worksheet to explain how the alleged quantity of final product was arrived at based on the note book. Additionally, it was highlighted that the duty paid on input materials was higher than the duty on the final product, making clandestine removal unlikely. Various legal precedents were cited to support the argument that mere reliance on private note books without corroborating evidence was insufficient to establish clandestine manufacture.

In response, the Departmental Representative argued that the appellant had the opportunity to inspect the seized record, including the note book, and raise objections earlier. It was emphasized that the worker maintaining the note book was experienced and the authenticity of the record was not questioned. The Department contended that in cases of clandestine manufacture, it was not necessary for the manufacturer to maintain incriminating records, and the burden of proof lay on the department based on a preponderance of probability. The Department also highlighted the lack of evidence regarding the appellant's installed capacity to dispute the alleged quantity of production. Ultimately, the Department argued that the discrepancy between the records indicated clandestine removal, justifying the Commissioner's decision.

Upon considering the submissions and reviewing the record, the Tribunal found a fundamental issue regarding the lack of a worksheet to explain how the alleged excess production was calculated. Despite this issue not being specifically raised during adjudication, the Tribunal deemed it crucial to establish the basis for the alleged quantity of clandestine production. As a result, the Tribunal set aside the Commissioner's Order and remanded the matter for a fresh decision by the Assistant Commissioner, directing the Department to provide a suitable worksheet to the appellant to clarify the calculation of the alleged quantity based on the seized records. This decision aimed to ensure a fair opportunity for the appellant to present their case with reference to the evidence provided by the Department.