COMMISSIONER OF CENTRAL EXCISE Vs. MANJU CHEMICALS

JUDGEMENT

(1.) IN this Revenue appeal the Revenue is challenging the Commissioner's Order -in -Appeal No. 53/2001, dated 26 -3 -2001 by which the Commissioner has held that the Revenue has not raised demands in the show cause notice with regard to confiscation of goods. He has also noted that the only evidence for clandestine removal relied by the Revenue is pertaining to the statement furnished to the bank authorities for the purpose of seeking higher loan and cash credit facility. He has noted that such evidence has not been accepted by the Tribunal in the case of Rishab Refractories (P) Ltd. v. CCE, Chandigarh as reported in 1996 (87) E.L.T. 93 and also in the case of Punjab Oil and Silicate v. CCE as reported in 1993 (65) E.L.T 268 and that of Hon'ble High Court, Madras in the matter of State of Tamil Nadu v. India Crafts & Industries reported in 1970 (25) S.T.C 466.

(2.) I have heard ld. DR, Shri C. Mani for the Revenue and Shri Venkatachalam, Counsel for the respondent. Ld. DR took me through the grounds of appeal and contended that the fact that the appellant having approached with the bank with statement showing higher production itself is sufficient for the purpose of confirmation of demands. He has also pointed out that the assessee had remitted the amount of Rs. 79,421/ - vide TR6 challan dated 21 -7 -98 and therefore a show cause notice was issued to the appellant for proposal to imposition of penalty under Rule 173Q.

(3.) ON a careful consideration of the submission, I notice that the Revenue has proceeded to propose to imposition of penalty under Rule 173Q. There is no proposal for confirming the demands and also bringing out the fact that appellants have admitted the liability and paid the sum and as how the same were confirmed by the order -in -original. It is a fundamental principle of natural justice that the appellant should be put to notice before the demands are confirmed and it is well settled position of law in the case of CCE v. Kosan Metal Products. The Commissioner's finding that without issue of show cause notice demands confirmed by Order -in -Original are not sustainable and it is supported by Apex Court's judgment rendered in the case of CCE v. Kosan Metal Products. However, in the noted judgments the Tribunal and the Hon'ble High Court of Madras have clearly laid down that there has to be cogent evidence for the purpose of confirmation of demands on clandestine clearance of goods. In this case the assessee had merely filed an exaggerated stock statement for availing over draft (OD) facility from the bank. The Tribunal has already held in the said judgments that by giving such an inflated stock statement to the bank for the purpose of OD facility does not ipso facto lead to the conclusion that there was a manufacture and removal of goods clandestinely. J do not see any infirmity in the impugned order and hence the same is confirmed by rejecting the Revenue appeal.