2002 (2) TMI 687 - AT - Central Excise

Summary

Issues:
- Alleged clandestine removal of goods exceeding exemption limit
- Calculation of estimated production based on statements
- Confirmation of duty demand and penalty imposition

Analysis:
1. Alleged Clandestine Removal of Goods Exceeding Exemption Limit:
- The appellants were manufacturing cleansing and washing powder under small scale exemption notification.
- Central Excise Officers found 568 bags of powder in stock during a visit, leading to suspicions of clandestine removal.
- Lack of immediate production records raised concerns, but records were later produced with entries of the bags.

2. Calculation of Estimated Production Based on Statements:
- Statements of the Proprietor and Labour-in-Charge were crucial in estimating production.
- Revenue calculated production based on Labour-in-Charge's statement, suspecting excess clearances beyond exemption limit.
- Show cause notices were issued for duty demand and penalty imposition, confirmed by Joint Commissioner and upheld by Commissioner (Appeals).

3. Confirmation of Duty Demand and Penalty Imposition:
- Appellants argued that the Revenue's case relied solely on the Labour-in-Charge's statement, who had limited tenure.
- Appellants contended that the charges of clandestine removal required substantial evidence, which was lacking.
- The Revenue pointed to the presence of 568 bags during the visit as evidence of clandestine activities.
- The Tribunal noted discrepancies in the statements and lack of substantial evidence to support the Revenue's claims.

4. Judgment:
- The Tribunal found insufficient evidence to support the allegations of clandestine activities by the appellants.
- Lack of consistent worker numbers, machine capacity details, and absence of concrete proof weakened the Revenue's case.
- Non-production of records by the appellants, though suspicious, was not substantial evidence of wrongdoing.
- The Tribunal set aside the impugned order, ruling in favor of the appellants and granting consequential relief.