2005 (2) TMI 744 - AT - Central Excise

Summary

Issues:
- Confirmation of demand and penalty imposition based on maintaining two sets of invoices with the same serial number.
- Appellants' contention of preparing a second invoice due to sales tax payment issue.
- Appellants' argument regarding lack of proof of manufacture of goods and clandestine removal.
- Revenue's reliance on Central Excise Rules for cancellation of invoices and duty confirmation.
- Tribunal's analysis of the case law cited by the appellants.
- Final decision on the appeal.

Confirmation of Demand and Penalty:
The appeal was filed against the Orders-in-Appeal confirming a demand of Rs. 1,75,864 and imposing a penalty of Rs. 50,000 on the appellants. The Excise Officers found that the appellants maintained two sets of invoices with the same serial number, indicating clearance of goods on duty payment only once. A show cause notice was issued for demanding duty and imposing a penalty due to the alleged clearance of goods twice on the same invoices without full duty payment.

Appellants' Contention:
The appellants argued that they prepared the second invoice due to a sales tax payment issue. They claimed that the first invoice showed sales tax payment, while the second rectified this error as sales tax was exempted. The appellants emphasized that no shortage of raw material or finished products was found during verification. They cited Tribunal decisions to support their argument that duty cannot be demanded solely based on maintaining parallel sets of invoices without evidence of clandestine removal.

Revenue's Position and Tribunal's Analysis:
The Revenue contended that the appellants cleared goods under the same serial number to different customers using two sets of invoices. They relied on Section 173G of Central Excise Rules, stating that the failure to cancel an invoice indicated double clearance. The Tribunal noted that the appellants did not dispute maintaining parallel invoices but found their explanation unsatisfactory. The Tribunal highlighted that the Central Excise Rules do not permit manufacturers to have two sets of invoices with the same serial number without following the cancellation procedure.

Case Law Analysis and Final Decision:
The Tribunal found that the case law cited by the appellants was not applicable as statutory documents proving duty payment were recovered from the appellants' premises. The Tribunal distinguished the present case from the SKV Chemicals case where Rule 173G was not considered. Ultimately, the Tribunal dismissed the appeal, finding no error in the impugned order.

In conclusion, the Tribunal upheld the demand confirmation and penalty imposition based on the appellants' maintenance of two sets of invoices with the same serial number, rejecting their explanations and legal arguments.