1999 (5) TMI 236 - AT - Central Excise

Summary

Issues:
Duty demand on alleged clandestine removal of cement, imposition of penalties under various provisions, reliability of recovered registers as evidence, capacity of the mill, stoppage of production due to regulatory issues and floods, financial hardship, imposition of penalty on directors, waiver of pre-deposit requirements.

Analysis:

1. Duty Demand and Penalties:
The Commissioner confirmed a duty demand on the alleged clandestine removal of cement and imposed penalties under Section 11AC of the Central Excise Act, Rule 173Q of the Central Excise Rules, and Rule 209A of the Central Excise Rules. The appellant challenged these based on unreliable registers, capacity constraints, regulatory issues causing production stoppage, and financial hardship. The Department argued detailed evidence supporting the charges, including identified signatures, non-cooperation of directors, and destruction of internal records. The Tribunal noted the contentious nature of the matter and directed a pre-deposit of Rs. 12 lakhs towards duty and one lakh towards penalty under Rule 173Q, waiving the pre-deposit requirement for the penalty under Section 11AC.

2. Reliability of Evidence:
The case primarily relied on entries in recovered registers and statements from personnel. The appellant contested the reliability of these registers due to discrepancies, capacity limitations, and production stoppage. The Department highlighted identified signatures, non-cooperation of directors, and destruction of internal records as evidence of guilt. The Tribunal acknowledged the arguable nature of the case but directed a pre-deposit based on the evidence presented.

3. Financial Hardship and Penalty on Directors:
The appellant pleaded financial hardship based on a balance sheet showing heavy losses. The Department contested this citing improved financial position and high sales income. The Tribunal considered the financial position, waived the pre-deposit requirement for the penalty on directors, and stayed the recovery pending appeal.

4. Compliance and Reporting:
The Tribunal directed the appellant to comply with the pre-deposit requirements within a specified timeline and report compliance by a set date.

In conclusion, the Tribunal addressed the duty demand, penalties, reliability of evidence, financial hardship, and compliance issues comprehensively, balancing the arguments presented by the appellant and the Department to ensure a fair resolution pending the appeal process.