2011 (1) TMI 827 - AT - Central Excise

Demand, interest and penalty - The appellant are manufacturer of plastic master batches chargeable to Central Excise Duty - Their factory premises were visited by the Jurisdictional Central Excise officers, the following irregularities were detected -(i)shortage of various items of finished goods (ii)shortage of cenvated raw material (iii)excess of semi-finished material rejected master batch (iv)non-payment of duty on clearances of sample - Held that - though the statement of Shri S.S. Thakur, Manager and Authorised Signatory was recorded twice, he could not give any satisfactory explanation for the shortage of the finished goods and cenvated inputs and clearances of the samples without payment of duty - Also find that Shri S.C. Jain, the Managing Director of the appellant company was summoned thrice but he never appeared before investigating officers - Similarly, there is no satisfactory explanation for the excess quantity in respect of the semi-finished goods - Therefore, decided against the assessee.

Issues:
1. Detection of irregularities during a visit to the factory premises by Central Excise officers, including shortages of finished goods and raw materials, non-payment of duty on clearances, and excess semi-finished material.
2. Confirmation of duty demand, penalties, and confiscation of goods by Deputy Commissioner, upheld by Commissioner (Appeals).
3. Appeal against the Commissioner (Appeals) order filed by the appellant.
4. Lack of representation by the appellant during the hearing.
5. Defense by the Departmental Representative regarding the accepted irregularities and lack of explanations by the appellant.
6. Analysis of the submissions and grounds of appeal by the Tribunal.

Detailed Analysis:

1. The Central Excise officers detected various irregularities at the appellant's factory premises, including shortages of finished goods, raw materials, non-payment of duty on clearances, and excess semi-finished material. The appellant's Manager accepted these irregularities but failed to provide satisfactory explanations during the investigation.

2. The Deputy Commissioner, through an order-in-original, confirmed the duty demand on the shortages, imposed penalties under Section 11AC and Rule 15 of the Cenvat Credit Rules, and ordered the confiscation of excess semi-finished goods. The Commissioner (Appeals) upheld this order, leading to the appellant filing an appeal challenging this decision.

3. The appellant, although not present during the hearing, submitted a letter requesting a decision on the appeal based on the merits presented in the appeal memorandum.

4. Despite the absence of the appellant during the hearing, the Departmental Representative defended the impugned order, highlighting the accepted irregularities by the appellant and the lack of cooperation from the Managing Director. The Department argued that the duty demand, penalties, and confiscation were justified due to the unexplained discrepancies.

5. The Tribunal carefully considered the Department's submissions, reviewed the grounds of appeal, and found no merit in the appellant's contentions. The Tribunal noted the lack of explanations for the shortages of finished goods and raw materials, as well as the clearances of samples without duty payment. The Tribunal also emphasized the absence of satisfactory explanations for the excess semi-finished goods and the non-cooperation of the Managing Director during the investigation.

6. Consequently, the Tribunal dismissed the appeal, upholding the orders of the Deputy Commissioner and the Commissioner (Appeals) due to the appellant's failure to provide adequate explanations for the detected irregularities and the lack of cooperation during the investigation.

This detailed analysis outlines the key issues, the progression of the case, the arguments presented by both parties, and the final decision reached by the Tribunal based on the evidence and legal considerations.

← Previous Next →