1999 (2) TMI 191 - AT - Central Excise

Summary

Issues: Alleged duty evasion through sending semi-finished goods to job workers for finishing.

Analysis:
The case involved allegations of duty evasion by sending semi-finished steering wheels to a job worker for finishing operations. The appellants were accused of sending goods to a job worker, claiming they lacked the facilities for certain tests, leading to duty evasion of Rs. 16,90,721. The Commissioner confirmed the duty and imposed penalties on the appellants and three individuals under various rules.

Advocate's Submission:
The advocate for the appellants argued that the closure of the job worker's unit was temporary, and they outsourced finishing operations during that period. The advocate contended that the adjudicating authority's conclusion was incorrect, as the job worker did carry out finishing operations. The advocate highlighted that sending goods to multiple job workers indicated the lack of in-house facilities for finishing processes.

Respondent's Argument:
The Respondent reiterated the findings of the adjudicating authority, emphasizing evidence suggesting that the job worker was not actually performing the required finishing operations. The Respondent contended that there was no proof that goods sent to other job workers were returned after finishing operations.

Judgment:
The Tribunal observed that the department did not dispute the issuance of multiple challans to different job workers for finishing operations. The Tribunal found the statements regarding the availability of facilities for finishing operations ambiguous. The Tribunal noted that duty demands were based on the assumption of the job worker's closure without thorough investigation. The Tribunal criticized the adjudicating authority for not adequately addressing the outsourcing of finishing operations during the job worker's temporary closure. The Tribunal held that the burden of proof was incorrectly placed on the appellants and ruled in favor of the appellants, setting aside the impugned order and allowing all appeals.