2011 (9) TMI 416 - AT - Central Excise

Assessee s contention that there is clerical error relating to weight in annexures to return - assessable value declared is in conformity with value declared in invoices - Held that - The Authority did not proceed to inquire about the veracity of the claim of packing of pouches of different weight during different periods, to examine about the requirement of Section 4A of Notification as to weight of the goods if any prescribed, to ascertain whether contents in the container was of declared quantity and of prescribed weight or not, to examine buyers whose name appeared in the respective invoices to ascertain weight of goods contained in the poly packs, to verify stock record, and to examine notification prescribing the basis for determination of assessable value in respect of disputed goods. Thereby, the matter is remitted back to adjudicating authority for re-adjudication.

Summary

Issues:
1. Alleged clerical mistake in the Annexure to ER-1 return for the months of October 2007 and November 2007.
2. Discrepancies in the quantity and weight of goods cleared.
3. Failure to verify stock records and investigate alleged discrepancies.
4. Lack of examination regarding the trade practice of selling goods with different weight packs.
5. Need to determine the weight of goods packed in pouches and poly packs for accurate assessment.
6. Examination of invoices for compliance with Central Excise Act and relevant notifications.

Analysis:

1. Clerical Mistake Allegation:
The appellant contended that the discrepancies in the Annexure to ER-1 return were due to clerical errors, emphasizing that the assessable value declared in the returns matched the values in the corresponding invoices. The appellant argued that the errors were unintentional and did not affect the duty payment. The appellate authority upheld the adjudication despite the apparent clerical errors, leading to the appellant's plea for consideration without prejudice.

2. Discrepancies in Quantity and Weight:
The respondent, however, argued that the discrepancies persisted for two months without a satisfactory explanation from the appellant, casting doubt on the accuracy of the returns. The adjudicating authority upheld the order due to the repeated discrepancies, indicating a misdeclaration by the appellant. The need for a thorough examination of the discrepancies and their impact on the accuracy of the returns was highlighted.

3. Failure to Verify Stock Records:
The lack of verification of stock records by the authorities was noted, raising concerns about the basis for the allegations and the absence of evidence supporting clandestine activities or contumacious conduct by the appellant. The failure to investigate the reasons behind the clerical errors and the impact on the overall assessment process was highlighted as a procedural flaw.

4. Trade Practice Examination:
The adjudicating authority was criticized for not delving into the trade practices related to selling goods with different weight packs, especially considering the appellant's claims regarding the standard packing norms and trade practices. The need to examine the weight of goods packed in pouches and poly packs to ascertain the accuracy of the declared quantities was emphasized.

5. Weight Determination and Invoice Examination:
The judgment highlighted the necessity to determine the weight of goods normally packed in pouches and poly packs for the disputed brands to ensure accurate assessment. Additionally, a detailed examination of the invoices for compliance with the Central Excise Act and relevant notifications was deemed essential to validate the declared quantities and assessable values.

6. Remand for Re-Adjudication:
In light of the procedural lapses and the complexity of the issues raised, the matter was remanded to the adjudicating authority for re-examination. Specific guidelines were provided for the authority to follow, including verifying stock records, examining trade practices, and ensuring compliance with relevant regulations. The importance of a reasoned and timely re-adjudication process was stressed to address the long-standing nature of the case and the appellant's right to a fair and thorough review.