1999 (8) TMI 238 - AT - Central Excise

Summary

Issues:
1. Duty demanded on shortages and clearance of HDPE Granules without payment of duty.
2. Imposition of penalty.

Analysis:
1. The case involved the demand of duty on shortages noticed during stock taking and on the clearance of HDPE Granules without payment of duty, along with the imposition of a penalty. The appellants contested the demand, stating that certain goods were cleared on a specific date but entries were not made in the required registers due to unforeseen circumstances. The Commissioner based the decision on physical verification and records indicating removal of goods without duty payment.

2. The appellants argued that discrepancies in stock were due to the nature of their manufacturing process, where certain goods were issued for further processing before being fully recorded. They also provided explanations for the clearance of HDPE Granules, citing job work challans and procedural issues in maintaining records. The Commissioner found the explanations unsatisfactory and upheld the duty demand and penalty.

3. During the appeal, the appellants challenged the reliability of entries in the gate register maintained by Security Personnel, citing the illiteracy of staff as a reason for inaccuracies. They referenced a tribunal decision to support their claim. The appellants also contested the allegation of clandestine removal, emphasizing the lack of corroborative evidence. However, the Department argued that the register entries were valid and could be relied upon.

4. The judges considered the statements of involved parties, where admissions of shortages and excesses were made. The appellants failed to provide evidence of duty payment on shortages and excesses. The judges noted the procedural requirements for goods removal and found the allegations of shortages and excesses proven. The confiscation of goods and duty demand were deemed appropriate.

5. Ultimately, the judges upheld the duty demand and confiscation of goods but reduced the penalty imposed on the company. They emphasized the importance of following procedures in maintaining records and highlighted the consequences of failing to do so. The appeal was disposed of with modifications to the penalty amount.