1999 (9) TMI 323 - AT - Central Excise

Summary

Issues:
1. Duty evasion on broken biscuits production.
2. Penalty imposition on the involved parties.
3. Dispute regarding the excisability of broken biscuits and sugar syrup.

Analysis:
1. The case involved three stay applications related to appeals arising from the same order of the Commissioner regarding the manufacturing of biscuits on a job work basis. The issue revolved around the non-accounting of broken biscuits in the statutory register, leading to the presumption of clandestine clearance without payment of duty. The Commissioner confirmed the duty, imposed penalties, and confiscated the used biscuits, which led to the appeals challenging these decisions.

2. The appellant contended that the proceedings were based on presumption, emphasizing that broken biscuits were recycled and not cleared for sale. The non-maintenance of accounts for broken biscuits and sugar syrup was attributed to the belief that these goods were not excisable. The appellant argued that the penalty imposed was disproportionate, questioning the validity of the show cause notice based on inconsistent treatment of relevant documents.

3. The Tribunal examined the agreement between the parties, highlighting the practice of recycling broken biscuits as claimed by the appellants. The register showing the production and consumption of broken biscuits supported the appellant's assertion. The Tribunal found the appellants had a strong prima facie case in their favor, noting the known excisability of broken biscuits and sugar syrup in the industry. While acknowledging the lack of proportionality in the penalty imposed, the Tribunal waived the pre-deposit of duty for the appellant but directed a penalty deposit. The recovery of penalties on other parties was also stayed pending further proceedings. Compliance was set for a specific date.

This detailed analysis covers the duty evasion, penalty imposition, and the dispute over the excisability of broken biscuits and sugar syrup as addressed in the judgment by the Appellate Tribunal CEGAT, Mumbai.