1998 (11) TMI 300 - AT - Central Excise

Summary

Issues:
Dispensation of pre-deposit of duty and staying the recovery thereof.

Analysis:
The case involved the applicants seeking dispensation of pre-deposit of duty amounting to Rs. 23,344.65 and staying the recovery thereof. The applicants' factory was closed for manufacturing operations during a specific period, and upon reopening, they discovered a shortage of their final product due to theft from their non-duty paid store room. An FIR was lodged, but no culprits were identified. The Assistant Commissioner initially adjudicated the case without granting a personal hearing. The matter was remanded by the Commissioner (Appeals), and duty was confirmed again during de novo adjudication. The Commissioner (Appeals) observed that 'lost' or 'destroyed' includes loss due to theft, citing previous Tribunal judgments. The case was remanded back for adjudication, and the Commissioner confirmed the demand once more. The appellants argued that the Commissioner could not arrive at a different finding without an appeal by the Revenue against the Commissioner (Appeals) order. The Commissioner rejected their prayer for condonation, stating it was their responsibility to prevent theft. The Tribunal had previously held that thefts could be considered unavoidable accidents.

Counter-Arguments:
The Respondent argued that the appellant's duty was to prevent theft, and merely lodging a police complaint did not absolve them from paying Central Excise duty. It was established that a significant quantity of the appellants' final product was cleared without duty payment, making them liable for duty payment. Rule 225 mandated manufacturers to clear goods on payment of duty, holding them responsible for any contraventions. The Respondent referred to a Tribunal decision where theft was not considered an unavoidable accident, emphasizing the duty of manufacturers to prevent such incidents.

Rejoinder and Decision:
In the rejoinder, the appellants cited a High Court judgment, emphasizing that the Commissioner should not arrive at a different finding in demand proceedings when a definite finding had been made by the Commissioner (Appeals). The Tribunal, after considering both sides' submissions, found merit in the appellants' arguments and granted the stay petition unconditionally, suggesting that the appellants had a strong case on merits.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal principles involved, and the Tribunal's decision to grant the stay petition unconditionally based on the merits of the case.