1998 (12) TMI 270 - AT - Central Excise

Summary

Issues:
1. Duty demanded on removal of aluminium slugs with Modvat credit without reversing credit and removal of collapsible aluminium tubes without payment of duty.
2. Allegation of clandestine removal of two consignments of toothpaste.

Analysis:
1. The first issue involves the duty demanded on the removal of aluminium slugs and collapsible aluminium tubes. The appellant removed 203 metric tonnes of aluminium slugs without reversing the Modvat credit and removed collapsible aluminium tubes without payment of duty, resulting in a penalty of Rs. 20,000 being imposed. The appellant's advocate acknowledged the removal of aluminium slugs without reversing credit but argued that they were sent to a job worker for annealing and were subsequently received back. The Departmental Representative alleged mala fides based on discrepancies in the statements and documentation. The Tribunal analyzed Rule 57F and concluded that subsequent permission for removal could ratify the quantity removed, emphasizing the need for proper examination by the Collector to determine if the actions were within the terms of the permission granted.

2. The second issue pertains to the clandestine removal of two consignments of toothpaste. The Collector alleged that the goods were removed without payment of duty based on entries in the out material register and discrepancies in gate passes. The appellant provided explanations for the delays in removal, citing difficulties, but the Collector rejected these explanations. The Tribunal scrutinized the gate passes and out material register entries, highlighting discrepancies and ambiguities in the records. Ultimately, the Tribunal found that it was not established that the goods were removed without payment of duty, leading to the appeal being allowed and the Collector's order being set aside. Additionally, the penalty imposed for the contraventions was also set aside, pending a fresh decision on the penalty imposable.

In conclusion, the Tribunal's judgment addressed the duty demands and allegations of clandestine removal, emphasizing the need for proper examination of permissions and documentation to determine the liability for duty payment. The decision provided detailed analysis of the issues raised and set aside the Collector's order, allowing the appeal in part and calling for a fresh decision on the penalty.