- (1.) The question which arises in this appeal is whether the Tribunal could have set aside the earlier order passed by it under Section 35-C of the Central Excise Act (for short "the Act").
(2.) The demand relates to an alleged quantity of cold-rolled coils alleged to have been wrongfully suppressed by the respondent from its returns filed under the Act. A show-cause notice was issued and after hearing the assessee the Commissioner upheld the demand and imposed a penalty of Rs 1.50 crores. The respondent preferred an appeal to the Tribunal. The Tribunal in paragraph 12 of its Judgement upheld the particular demand for Rs 1,47,00,127 but reduced the penalty from Rs 1.50 crores to Rs 75 lakhs. The respondent made an application for rectification of the Tribunal's order under Section 35-C of the Act claiming that the Tribunal had not considered its submission that the evidence relied upon by the Department, namely, the plant performance report could not show that the respondent had actually dispatched the like amount because the plant performance report merely showed a stage in the manufacture of the cold-rolled coils and that the material would have to undergo further processes before it could be said that cold-rolled coils were complete. It is said that the RGI register would only reflect the subsequent stage when the finished product was available for being removed from the factory. There was in fact no discrepancy between the plant performance report and the entry of RGI register if this fact was taken into consideration and, therefore, no suppression.
(3.) The Tribunal accepted the application for rectification and set aside the demand by upholding the plea of the respondent, it said: "It has, therefore, on balance to be held that the Department has not produced sufficient material to successfully establish beyond reasonable doubt that the figures of production entered in the RGI register are incorrect. The demand for duty on this score cannot be confirmed. Consequently, the penalty imposed on this score of Rs 75 lakhs has also to be set aside.";