2000 (7) TMI 410 - AT - Central Excise

Summary

Issues:
- Duty payment on quantities of aerated beverages manufactured and cleared without payment of duty.
- Validity of norms of production in determining duty liability.
- Dispute over theoretical norms and actual production losses.
- Application of rules 173D and 173E in duty assessment.
- Requirement of reasonable evidence to establish duty liability.
- Lack of normal production determination and communication to the assessee.
- Insufficient material to conclude duty liability and penalty imposition.

Analysis:
1. The judgment deals with the confirmation of a duty payment proposal on aerated beverages manufactured and cleared without duty payment. The department relied on norms of production to establish the quantity of beverage manufactured from concentrate. However, the origin of these norms was not disclosed, and the appellant argued that theoretical norms did not account for actual production losses due to various factors like breakdowns and variations.

2. The appellant contended that norms between raw material and final product were theoretical and cited a handbook by the brand owner, Pepsico USA, to support their argument. Previous Tribunal decisions, including M/s. Parle Beverages & Ors., were referenced to highlight the rejection of duty liability based solely on theoretical calculations without considering actual production losses.

3. The department argued that industrial norms between raw material and finished products were common practice and cited rules 173D and 173E. However, the Tribunal noted that none of the persons involved in beverage production confirmed the possibility of achieving theoretical yields practically due to operational realities leading to wastage.

4. The Tribunal emphasized the need for reasonable evidence to establish duty liability and highlighted the lack of evidence beyond theoretical calculations. Rules 173D and 173E were found irrelevant as normal production was not determined, and the appellant's use of other inputs was not considered in duty assessment.

5. Ultimately, the Tribunal concluded that there was insufficient material to establish the manufacture or clearance of the beverages in question without duty payment. As a result, the appeal was allowed, and the impugned order was set aside, indicating no duty payment or penalty imposition based on the lack of evidence supporting duty liability.