2013 (5) TMI 211 - AT - Central Excise

Waiver of pre-deposit of duty/interest/penalty - clandestinely removal of goods manufactured in the factory premises Held that We find strong force in the contentions raised by appellant that if it is the case of the Revenue that appellant has used imported polyester chips for clandestine manufacturing and clearing of polyester yarn, it is for them to provide the evidences regarding the consignment which were imported and consigned to the appellant. In our view, the issue needs to be reconsidered by the adjudicating authority by providing the evidences relied upon in the show cause notice for arriving at conclusion. The issue also needs to be re-considered by the adjudicating authority, on granting the copies of Bills of Entry on which reliance has been placed for arriving at the quantum of polyester chips received by the appellant from M/s Shri Karni Enterprises. The lower authorities are directed to grant the copies of documents to the appellant and appellants, on receipt of such documents, would make their submissions. Thus, set aside the impugned order and remit the matter back to the adjudicating authority.

Summary

Issues:
Stay Petitions for waiver of pre-deposit of duty, interest, and penalty due to clandestine removal of polyester yarn without duty discharge.

Analysis:
The judgment pertains to two Stay Petitions seeking waiver of pre-deposit of duty, interest, and penalty amounting to Rs.49,69,072/-, confirmed as duty liability due to clandestine removal of polyester yarn without discharging duty. The main issue revolves around whether the appellant company clandestinely removed goods without duty discharge. The lower authorities confirmed the demand based on this premise, leading to the appeal seeking reconsideration. The appellant had already deposited a partial amount of Rs.17,01,423/-. The Tribunal allowed the waiver of pre-deposit for the balance amounts and decided to take up the appeals for disposal.

The counsel for the appellants argued that the demand was confirmed on the basis of clandestine removal, emphasizing the need for evidence regarding duty discharge on imported goods. The Revenue contended that the appellant created a fictitious company to import goods and evade duty, highlighting procedural requirements for CENVAT Credit eligibility. The Tribunal observed that the case hinged on the appellant using imported polyester chips for manufacturing polyester yarn clandestinely. It stressed the need for evidence regarding the imported consignments and Bills of Entry to determine duty discharge and CENVAT Credit eligibility.

The Tribunal, after considering submissions and records, found discrepancies in the lower authorities' decision. It directed the adjudicating authority to provide evidence relied upon in the show cause notice and grant copies of relevant documents to the appellant for a fair reconsideration of the issue. The matter was remitted back for fresh consideration, emphasizing the importance of evidence regarding imported consignments and duty discharge. The appellants were instructed not to seek a refund of the deposited amount until the case's adjudication. The appeals were disposed of by way of remand, leaving all issues open for further examination.

In conclusion, the judgment highlights the significance of evidence in determining duty liability and CENVAT Credit eligibility. It underscores the need for a thorough reconsideration of the case based on provided documents and evidence to ensure a fair decision by the adjudicating authority.