2000 (11) TMI 875 - AT - Central Excise

Summary

Issues:
1. Alleged clandestine manufacture and removal of biscuits
2. Abatement on account of durable and returnable containers
3. Imposition of personal penalty

Analysis:

Issue 1: Alleged clandestine manufacture and removal of biscuits:
The appellants, engaged in biscuit manufacturing, were issued a show cause notice for duty demand based on the alleged clandestine removal of 15,543 tins of biscuits without duty payment. The Revenue observed discrepancies in invoices and gate passes, indicating possible clandestine activities. The appellants defended by citing a factory strike period and invoice numbering changes for sales tax purposes. However, the tribunal found the explanations unconvincing, noting the absence of gate passes for the tins in question and irregularities in invoice numbering. The appellants failed to prove the legitimacy of their invoicing practices, leading to the confirmation of the duty demand of Rs. 1,93,245.38.

Issue 2: Abatement on account of durable and returnable containers:
A demand of Rs. 4,07,303.00 was raised against the appellants for abatement related to durable containers, with the Revenue estimating the rotation factor at ten trips. The tribunal, considering past practices and an order in a similar case, accepted the appellants' argument that the normal life of metal containers is six rotations. Consequently, the duty demand on this ground was set aside, highlighting the lack of justification for invoking a longer period of limitation.

Issue 3: Imposition of personal penalty:
The Commissioner imposed a personal penalty of Rs. 75,000/-, which was reduced to Rs. 30,000/- by the tribunal due to the significant reduction in the overall demand amount. The penalty reduction was in line with the adjustments made in the duty demands. Therefore, the final decision resulted in the confirmation of Rs. 1,93,245.38 duty demand, setting aside the Rs. 4,07,303.00 demand, and reducing the penalty to Rs. 30,000/-.

In conclusion, the tribunal upheld the duty demand related to clandestine activities, overturned the abatement demand concerning durable containers, and reduced the imposed penalty considering the adjustments in the duty demands.