2000 (4) TMI 406 - AT - Central Excise

Summary

Issues:
Dispensation of pre-deposit of Central Excise duty and penalty confirmed by Collector (Judicial), Calcutta-II Collectorate. Adjudication based on alleged suppression of production and clandestine removal without payment of duty. Restoration of appeal and stay petition dismissed for non-prosecution. Arguments for and against unconditional waiver of pre-deposit based on financial hardship and merit of the case.

Analysis:

Issue 1: Dispensation of pre-deposit of Central Excise duty and penalty
The appellant, M/s. Dunlop India Limited, sought dispensation of pre-deposit of Central Excise duty of Rs. 1,89,82,357/- and penalty of Rs. 20,00,000/- confirmed by the Collector (Judicial) of Central Excise, Calcutta-II Collectorate. The allegations were based on discrepancies between the Progressive Moulding Register (PMR) and RG 1 production records, indicating clandestine removals without payment of duty. The appellant denied the allegations, claiming physical control of the factory during the material time made evasion impossible. The Tribunal observed arguable merits on both sides due to variations in production figures and granted unconditional waiver of pre-deposit considering the financial condition of the appellants.

Issue 2: Adjudication based on alleged suppression of production and clandestine removal
The show cause notice alleged that the appellant suppressed production of tyres and clandestinely removed them without paying Central Excise duty. The discrepancies in production records and excess raw material receipts supported the allegations. The appellant disputed the figures, arguing that RG 1 production figures exceeded those in the PMR, questioning the reliability of the show cause notice. The Order-in-Original confirmed the duty and imposed the penalty, leading to the appeal and stay petition. The Tribunal found the case arguable on merits, pending final disposal of the appeal.

Issue 3: Restoration of appeal and stay petition
The appeal and stay petition filed in 1992 faced dismissal for non-prosecution in 1999 but were later restored by the Tribunal. The stay petition was taken up for disposal in 2000, where the appellant's counsel highlighted discrepancies in production figures and lack of proof for clandestine removals. The Revenue's representative supported the impugned order, opposing the unconditional waiver of pre-deposit. The Tribunal, considering the arguable merits and financial hardship faced by the appellants, granted unconditional waiver of the duty and penalty, allowing the stay petition and scheduling the appeal for hearing after eight years.

This detailed analysis of the judgment from the Appellate Tribunal CEGAT, Calcutta, highlights the issues involved, the arguments presented, and the Tribunal's decision regarding the dispensation of pre-deposit, adjudication based on alleged violations, and the restoration of the appeal and stay petition.