2000 (2) TMI 320 - AT - Central Excise

Summary

Issues:
- Allegation of clearance of goods without payment of duty
- Need for further enquiry by the Department
- Burden of proof in case of removal of finished goods
- Appreciation of evidence by the Tribunal

Allegation of clearance of goods without payment of duty:
The Commissioner of Central Excise filed a Reference Application against the Tribunal's Final Order, which held that the Department failed to prove the case beyond reasonable doubt regarding the clearance of goods without duty payment. The Department argued that evidence, including statements from the Managing Director and employees of the assessee, indicated that finished goods were being removed without excise duty payment under the guise of semi-finished goods. The Department sought to refer certain points of law to the High Court, contending that the Tribunal did not appreciate the material evidence properly.

Need for further enquiry by the Department:
The Department raised questions regarding the necessity for additional inquiries when evidence suggested false entries and non-operational status of the factory in question. The Department argued that despite the factory being inactive and lacking necessary machinery, further detailed questioning was essential. However, the Tribunal noted that the burden of proof lay with the Department, and the Final Order was based on an analysis of existing evidence without the need for further legal inquiries.

Burden of proof in case of removal of finished goods:
The case revolved around the removal of finished goods disguised as semi-finished products, with the burden of proof becoming a contentious issue. The Department alleged that the goods sent for further processing were actually finished products, not semi-finished. The Tribunal's Final Order highlighted that the Department failed to establish whether other job workers were also conducting the required processes and that the evidence provided was not definitive. The Tribunal emphasized that the burden of proof rested on the assessee to counter the allegations, and the Final Order was based on the evaluation of the evidence presented.

Appreciation of evidence by the Tribunal:
Upon reviewing the arguments from both sides, the Tribunal found that the Final Order extensively examined the statements and evidence provided by the Department. The Tribunal noted discrepancies in the Department's evidence and concluded that the burden of proof was incorrectly shifted to the assessee. The Final Order was based on a thorough analysis of the evidence, and no legal questions emerged from the Tribunal's findings. Consequently, the Reference Application was deemed meritless and dismissed by the Tribunal.