1999 (6) TMI 304 - AT - Central Excise

Summary

Issues:
1. Demand confirmation on clandestine clearance of M.S. Flats
2. Disallowance of deemed credit on M.S. Billets
3. Imposition of penalty
4. Confiscation of assets

Analysis:

Issue 1: Demand Confirmation on Clandestine Clearance of M.S. Flats
The case involved the clandestine clearance of M.S. Flats by the appellants. The Central Excise Officers discovered the clandestine clearance of M.S. Billets and issued a show cause notice to the appellants. The appellants contested the demand, arguing that it was based on assumptions. The appellants claimed they had opted for Modvat credit and had not received the quantity alleged by the authorities. The Tribunal found that the Department failed to provide sufficient evidence of actual delivery of the goods to the appellants, leading to the appeal being allowed on this issue.

Issue 2: Disallowance of Deemed Credit on M.S. Billets
The appellants had availed deemed Modvat credit on M.S. Billets, claiming they were duty paid. However, investigations revealed that these billets were manufactured by a company without duty payment. As a result, the Tribunal ruled that the deemed Modvat credit was wrongly taken by the appellants, leading to the appeal being dismissed on this count.

Issue 3: Imposition of Penalty
The Tribunal held that the appellants had wrongly taken deemed Modvat credit despite knowing the goods were non-duty paid, justifying the imposition of a penalty. However, considering the circumstances, the Tribunal deemed the initial penalty amount too harsh and reduced it from Rs. 3,50,000 to Rs. 25,000.

Issue 4: Confiscation of Assets
Regarding the confiscation of land, plant, building, and machinery belonging to the appellants, the Tribunal found it unjustifiable. Therefore, the order of confiscation was set aside.

In conclusion, the appeal was disposed of with the demand confirmation on clandestine clearance of M.S. Flats being rejected, the disallowance of deemed credit on M.S. Billets being upheld, the penalty being reduced, and the confiscation of assets being set aside.