1999 (3) TMI 381 - AT - Central Excise

Summary

Issues involved: Appeal against order confirming demand for duty on removal of iron and steel products without payment of duty, confiscation of seized goods, penalty under Rule 173Q.

Details of the Judgment:

1. Major Demand for Finished Products:
- Appellant cleared 2146.545 metric tonnes of finished products without payment of duty.
- Basis for demand: Entries in labour pay book showing payments for loading and unloading.
- Goods manufactured on job work basis for M/s. Tata Iron and Steel Company (TISCO).
- Part of goods sold to M/s. Prakash Traders, a concern of a director of the company.

2. Demand on Mild Steel Channels and Angles:
- Demand of Rs 3.17 lacs based on a production register recovered from factory premises.
- Discrepancies between production register and RG 7 register entries based on actual weighment.

3. Labour Pay Book Discrepancies:
- Collector found discrepancies in loading details in the labour pay book and Central Excise gate passes.
- No gate passes issued for some trucks, despite freight payment.
- Labour contractor's statements did not support appellant's claim of duty payment.

4. Ownership of Adjacent Plot:
- Ownership of adjacent plot where goods were stored and sold raised questions.
- Lack of evidence regarding ownership of the plot by the appellant.
- Failure to inform authorities about ownership of the plot during investigations.

5. Clandestine Removal and Duty Payment:
- Appellant failed to demonstrate duty payment for goods removed from the factory.
- Evidence of payment for removal considered sufficient to establish removal without duty payment.

6. Modvat Credit Disallowance:
- Disallowance of Modvat credit for inputs found outside the factory.
- Dispute over permission for storing goods outside the factory gate affecting credit eligibility.
- Confiscation of goods stored outside the factory gate questioned.

7. Confirmation of Order:
- Appellant did not contest demand on mild steel channels and angles, leading to confirmation of that part of the order.
- No interference with other portions of the order except for the Modvat credit issue.
- Appeal allowed to a certain extent, with directions for the Commissioner to act according to the law.