2013 (5) TMI 407 - AT - Central Excise

Notification No.214/86-CE - Job Work - Benefit denied - clandestine manufacture - Clarence of goods without payment of duty - Held that - In the instant case, the goods that are manufactured from the raw materials supplied by Aabcee Packaging were not cleared to their premises. Even this clearance was effected under cover of invoices of the raw material supplier and not under those of the so-called job worker. There is also no evidence of the goods having suffered duty at the hands of the buyers. Thus, the appellant cannot claim the benefit of the above notification. After pursuing the statements coupled with the relevant invoices support the Revenue s case that the appellants were clandestinely manufacturing and clearing excisable goods without payment of duty during the material period. Therefore the demand of duty/interest/penalty are all sustainable. Thus, appeal is dismissed. However, the separate penalty imposed on the proprietor of Srinidhi Packaging cannot be sustained. For the same offence, there cannot be separate penalties on the proprietor and his concern.

Summary

Issues:
1. Upholding of Assistant Commissioner's order by the appellate Commissioner.
2. Demand of central excise duty, interest, and penalties on the appellant.
3. Claim for exemption under Notification No.214/86-CE.
4. Imposition of separate penalty on the proprietor of the appellant.

Analysis:

1. The appeals were filed against the appellate Commissioner's decision affirming the Assistant Commissioner's order. The Assistant Commissioner, in response to a show-cause notice, confirmed the demand of central excise duty, interest, and penalties on the appellant. The duty amount and interest were already partially paid by the appellant, which were appropriated towards the total demand. Penalties were imposed under the relevant sections of the Central Excise Act, 1944.

2. The dispute revolved around the manufacturing and clearance of corrugated boxes by the appellant without payment of duty, under the guise of job work for another entity. The lower authorities found the goods were clandestinely manufactured and cleared, leading to the demand for duty, interest, and penalties. The appellant's argument of job work for exemption under Notification No.214/86-CE was rejected due to procedural non-compliance and lack of evidence supporting their claim.

3. The appellant contended that they were merely undertaking job work for another entity due to machinery constraints. However, to claim exemption under the notification, specific conditions needed to be met, including the filing of declarations by the raw material supplier and clearance under the job worker's invoices. The evidence presented did not support the appellant's claim for exemption, as goods were not cleared to the raw material supplier's premises as required.

4. The proprietor of the appellant was separately penalized, which was challenged. The Tribunal held that imposing separate penalties on the proprietor and the concern for the same offense was not justified. As a result, the penalty on the proprietor was set aside, while the demand for duty, interest, and penalties on the appellant was upheld. The appeal by the appellant was dismissed concerning the demand, but allowed regarding the separate penalty imposed on the proprietor.