2013 (10) TMI 399 - AT - Central Excise

Exemption Notification No. 6/2002-CE - Assessee was engaged in the manufacture of asbestos cement pressure pipes used for conveying drinking water falling under Chapter 68 Revenue was of the view that the appellants employees did not allow them to conduct the investigation at their end they shifted focus of investigation at the end of suppliers of fly ash Held that - Held that - Prima facie there seems to ample evidence against the appellant indicating that the procurement of fly ash was not actually being done by them and only the records showing receipt of the same were being maintained - The Revenue had conducted investigations at the suppliers end at the transporters end and at dharmakanta end - It had come out that the fly ash was being lifted by the transporter who was initially accepted the transportation but subsequently denied it - However the evidentiary value of these statements can be appreciated only at the time of final disposal of the appeal. the statement of Shri Mahmood Ahmad and Shri V.K. Agrawal Assistant Engineers of M/s Kota Thermal Power were vital piece of evidence indicating that they maintained all the records in their factory showing the parties lifting the fly ash and the appellants name does not appear in the records - The appellants stand that such lifting was being done from outside the pond where fly ash dumped it was done by the transporters and as such their name had not appeared in the records of Kota Thermal Power Plant can be examined only at final disposal. Bar of Limitation - In such a scenario even the aspect of plea of limitation may not be prima facie available to the appellant inasmuch as the entire case of Revenue was that records were being maintained only to show the receipt of consumption of fly ash which had turned out to be false. Waiver of Pre-Deposit Prima Facie the appellant does not have a case in his favour - The appellants have not pleaded any financial hardships and have not placed on record any evidence to show their poor financial condition applicant was directed to deposit 50% of the confirmed duty Upon such submission rest of the duty to be stayed till the disposal Partial Stay Granted.

Summary

Issues Involved:
Prayer to dispense with pre-deposit of duty and penalty | Interpretation of exemption notification for asbestos cement pipes | Allegations of hindering investigation | Discrepancies in fly ash procurement records | Contention regarding dharmakanta records | Allegations of evasion of excise duty | Assessment of financial hardship for waiver of pre-deposit | Decision on pre-deposit amount and stay of recovery

Interpretation of Exemption Notification:
The appellant, engaged in manufacturing asbestos cement pressure pipes, claimed exemption under Notification No. 6/2002-CE for using fly ash over 25%. They maintained proper records and filed returns as required. However, investigations by Revenue raised doubts about actual procurement of fly ash, leading to discrepancies in statements from suppliers and transporters.

Allegations of Hindering Investigation:
A dispute arose during an investigation visit to the appellant's factory, resulting in a clash between officers and employees. The Revenue alleged hindrance to the investigation, shifting focus to fly ash suppliers. Statements from suppliers and transporters contradicted the appellant's claims, raising questions about the authenticity of records and procurement practices.

Contention Regarding Dharmakanta Records:
The use of dharmakanta records by the appellant for weighing fly ash was contested. The Revenue questioned the authenticity of weighment slips, alleging fabrication. The appellant defended the records, presenting evidence of prior acceptance and expert opinion to refute the Revenue's claims.

Allegations of Evasion of Excise Duty:
The Revenue argued that investigations revealed fake record-keeping practices by the appellant, justifying an extended period of limitation. They raised concerns about discrepancies in fly ash procurement, transportation costs, and alleged misuse of cement in place of fly ash. The appellant countered, highlighting their adherence to proper procedures, cost-saving benefits of fly ash, and audits conducted on their factory.

Assessment of Financial Hardship for Waiver of Pre-Deposit:
The Tribunal considered the appellant's lack of a prima facie case and financial evidence for hardship. Despite no evidence of financial constraints, the Tribunal directed a 50% deposit of confirmed duty within 12 weeks. The waiver of the remaining duty and penalties was contingent on this pre-deposit, with recovery stayed during the appeal process.

In conclusion, the judgment addressed various issues concerning the interpretation of exemption notifications, hindrance to investigations, discrepancies in records, allegations of duty evasion, and financial assessment for pre-deposit waiver. The decision to require a 50% pre-deposit highlighted the need for compliance and financial accountability pending the appeal process. The Tribunal emphasized the importance of evidence and adherence to legal procedures in excise duty cases.