2008 (9) TMI 769 - AT - Central Excise

Summary

Issues involved: Allegations of diversion of duty-free raw material and under-valuation of final product.

Issue 1: Allegations of diversion of duty-free raw material
The appellant was alleged to have diverted duty-free procured raw material in the open market instead of using it in the manufacture of their final product. The Commissioner confirmed these allegations in the impugned order, which contradicted earlier show cause notices raising demands of duties for under-valuation of final products cleared during the same period. The Tribunal found that the Revenue cannot take contradictory stands on the same goods and period. It was deemed necessary for the Commissioner to adjudicate all notices together to clarify the Revenue's stand. The impugned order was set aside, and the matter was remanded for a fresh decision along with the earlier show cause notices. The appellant's request for cross-examination of witnesses was also to be considered afresh.

Issue 2: Under-valuation of final product
The earlier show cause notices alleged under-valuation of the final product, while the subsequent notice adjudicated in the impugned order claimed that the final product had not been cleared at all during the same period. The Tribunal observed the inconsistency in the Revenue's stance and emphasized the need for a single adjudication order to ensure clarity. The Tribunal did not delve into the merits of the case but allowed the appellants to present their defense and submissions in the fresh proceedings before the adjudicating authority.

The appeals were allowed by way of remand, with the decision pronounced on 29-9-2008.