ITC LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, BANGALORE

JUDGEMENT

(1.) THIS appeal arises from the Order -in -Appeal No. 6/2005 Central Excise dated 17 -1 -2005, passed by the Commissioner of Central Excise (Appeals), Bangalore. The Revenue has proceeded to confirm the demand of Rs. 41,221/ - in respect of 36,762 Nos. of cigarettes on the allegation that the same has been removed clandestinely. The above quantity of cigarettes were stolen from their factory premises and they had filed an FIR on 21 -5 -2002. However, the Revenue has considered the removal by theft as a clandestine removal. The learned Counsel submits that the appellants had filed FIR with regard to the theft of the cigarettes and the copy of the same was sent to the Department. The factory was under physical control of the Department. Therefore the question of clandestine removal does not arise. He submits that the grounds taken by the Department of clandestine removal is unsustainable in view of the company was their physical control. He submits that this Bench by Final Order No. 1205/2006 dated 20 -7 -2006 [(2007 (208) E.L.T. 277 (T)] has already decided the issue and the demands were set aside.

(2.) THE learned DR re -iterates the findings of the Commissioner (Appeals).

(3.) ON a careful consideration of the matter, it is seen from the impugned order that the appellants had filed FIR with regard to the theft of cigarettes and the same has been intimated to the Department. In view of this position, the question of alleging clandestine removal does not arise. Further plea is that the factory was under physical control of the Department and in the appellants own case, this view had been expressed by this Bench that the goods which were removed for testing purpose cannot be considered as clandestinely removed. The learned Counsel also pointed out the Mahazar drawn by the Department wherein it was clearly recorded that the stolen cigarettes which were subsequently seized were of defective cigarettes. We are of the considered opinion that the Department has not discharged their onus with regard to the clandestine removal of the goods without payment of duty. The impugned order is not legal and proper and the same is set aside. The appeal is allowed with consequential relief if any.