1998 (1) TMI 124 - AT - Central Excise

Summary

Issues:
Three appeals against common order-in-original passed by Additional Collector of Central Excise, Ahmedabad dated 26-3-1990.

Details:
The appellants, engaged in manufacturing Acid Slurry, faced demand of duty due to alleged association with dummy companies. They argued violation of natural justice in lack of cross-examination and reliance on statements without verification. Additional Collector's decision was contested based on the location of factories and the credibility of witnesses.

The appellants claimed denial of Modvat credit unjustified as they were entitled to it. They argued against clubbing clearances of separate units based on shared raw material storage. Citing precedents, they emphasized the need for separate premises and registrations to maintain distinct clearances.

Regarding the validity of the show cause notice, the Tribunal found it properly issued by the Additional Collector under relevant rules. On the merits, reliance on partners' statements and watchman's testimony was deemed valid. The burden of proof shifted to the appellants, who failed to demonstrate independent operation of the three units.

While duty payment was upheld due to established misstatement and suppression, the Modvat issue required further examination. The Tribunal directed a reevaluation of Modvat eligibility, emphasizing substantive compliance over procedural technicalities. The penalty amount was subject to reconsideration based on the outcome of the Modvat reassessment.

In conclusion, the appeals were disposed of with directions for reevaluation of Modvat eligibility and penalty amount in light of the Tribunal's findings.