2013 (6) TMI 7 - AT - Central Excise

Clandestine removal of goods - non-inclusion of certain elements to the assessable value as well as discrepancies in recorded operating result - duty demand with equivalent amount of penalty - Held that - Duty demand and penalties have under gone modification to the extent indicated against each allegation. That calls for re-computation of duty demand and penalty as well as interest on confirmed part of adjudication which shall be carried out by the Adjudicating Authority as soon as he receives this order. He shall only re-do the adjudication in respect of two limited aspects of remand as aforesaid. Penalty against Shri Neeraj Kumar Aggarwal is concerned we are in part agreement with Revenue as it is the established fact that the duty demand of ₹ 24,800/- has not resulted in vain but on discovery of cogent evidence and contumacious conduct of the appellant by investigation. Therefore, plea of the appellant of no mala fide does not get approval. As the questionable conduct and oblique motive of appellant is on record in the preceding paragraphs as well as nexus of both the firm is appreciable from the record in view of mass scale evasion noticed on different counts as aforesaid there should be penalty of ₹ 1 lakh on Shri Neeraj Kumar Aggarwal. His appeal is partly allowed. Penalty imposed on Shri Satyavan Singh is concerned his knowledge is attributable to the evasion. But his pre-meditated mind to cause evasion does not appear to be present in the entire discussion and findings of Adjudicating Authority. No doubt, he was authorised signatory. But, there is no scope to annul penalty fully in his appeal. However, in view of aforesaid appreciation of absence of his ill intent penalty imposed on Shri Satyavan Singh, authorised signatory of Sukalp Agencies is reduced to ₹ 10,000/-.

Issues Involved:
1. Clandestine removal of goods and issuance of invoices from the previous financial year's invoice book.
2. Non-recording of clearance in statutory records and non-issuance of excise invoices.
3. Overlapping duty demand for the same goods.
4. Non-inclusion of installation and testing charges in the assessable value.
5. Eligibility for SSI Exemption benefit.
6. Discrepancies between sale value in profit and loss account and excise invoices.
7. Reconciliation of duty payment figures.
8. Cum-duty benefit.
9. Penalty on individuals associated with the firms.

Issue-wise Detailed Analysis:

1. Clandestine Removal and Invoice Issuance:
Investigation revealed that Sukalp Agencies issued an invoice from the previous financial year's book to avoid scrutiny, resulting in a duty demand of Rs. 21,393/-. The appellant deposited this amount after detection. The tribunal confirmed the duty demand and the penalty under Section 11AC of the Central Excise Act, 1944, due to the appellant's questionable conduct.

2. Non-recording of Clearance:
A D.G. set was cleared without recording in statutory records or issuing an excise invoice, leading to a duty demand of Rs. 24,800/-. The tribunal confirmed the demand and penalty, rejecting the appellant's claim of inadvertent error.

3. Overlapping Duty Demand:
The tribunal found no evidence to support Revenue's claim of two D.G. sets being cleared in January 2002. It reduced the duty demand to Rs. 34,596/- and confirmed the penalty under Section 11AC, noting the appellant's mala fide intent.

4. Installation and Testing Charges:
The appellant failed to provide evidence separating installation and testing charges from the assessable value. The tribunal confirmed the duty demand of Rs. 19,58,726/- and the penalty, as the charges should form part of the assessable value.

5. SSI Exemption Benefit:
The appellant had already deposited Rs. 2,70,872/- for the SSI Exemption dispute. The tribunal directed appropriation of this amount and annulled the penalty, acknowledging the interpretation difficulty in the exemption notification.

6. Discrepancies in Sale Value:
The tribunal remanded the issue for further scrutiny, directing the adjudicating authority to verify if the appellant's trading activity was independent of manufacturing. The duty demand of Rs. 12,85,084/- was to be re-examined, and appropriate orders on duty, penalty, and interest were to be passed.

7. Reconciliation of Duty Payment Figures:
The tribunal remitted the issue for reconciliation of figures between the profit and loss account and excise invoices. The adjudicating authority was to grant the appellant an opportunity to reconcile and pass appropriate orders on duty, penalty, and interest.

8. Cum-duty Benefit:
The tribunal rejected the appellant's plea for cum-duty benefit, stating it would reward evasion.

9. Penalty on Individuals:
- Shri Neeraj Kumar Aggarwal: The tribunal reduced the penalty from Rs. 10 lakhs to Rs. 1 lakh, acknowledging the disproportionate nature of the original penalty but noting the appellant's contumacious conduct.
- Shri Satyavan Singh: The tribunal reduced the penalty from Rs. 50,000/- to Rs. 10,000/-, recognizing his role as an employee following instructions but noting his awareness of the evasion.

Conclusion:
The appeals were partly allowed with modifications to duty demands and penalties. The adjudicating authority was directed to re-compute and re-adjudicate specific issues as per the tribunal's directions.

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