2013 (12) TMI 517 - AT - Central Excise

Clandestine removal of goods - Invoices issued Waiver of Pre-deposit Held that - The appellants have not been able to make out a prima facie good case in their favour so as to allow the stay petition unconditionally - as clarified by the banks, such bank discounting can only be adopted on being satisfied that the goods covered by a particular invoice are actually received by the buyer - the fact that in some of the invoices having the same serial number, the amounts billed were different, also indicated that one serial number invoices was being used by the franchise units repeatedly - the evidences collected by Revenue as regards receipt of unaccounted cut-tobacco or receipt of tissue paper from M/s. Pamwi Tissues, against cash which do not stand reflected in their accounts are indicative of the activities of the franchise units - all the appellants directed to deposit 25% of duty amount as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
1. Confirmation of demands and imposition of penalties against multiple appellants by the Commissioner.

Analysis:
The judgment involved multiple petitions disposed of by a common order, all arising from impugned orders confirming demands and imposing penalties against various appellants. The demands and penalties were detailed in a table listing the appeal numbers, names of appellants, amounts demanded, and the respective periods involved.

The case revolved around allegations of evasion of central excise duty by franchise units of a company engaged in cigarette manufacturing. Investigations revealed that franchise units raised subsequent invoices with the same serial numbers to the company, indicating non-payment of duty for cleared goods. The company maintained duplicate entries in their books, discounted these invoices through banks, and recorded transactions supported by original and photocopy gate passes.

Statements from company officials and bank officials, along with documentary evidence, supported the Revenue's view that franchise units engaged in clandestine activities by dispatching cigarettes without paying duty to the company using the same serial numbered invoices.

During the hearing, appellants argued that the Revenue's case solely relied on bank discounting to address financial issues, lacking evidence related to raw materials, suppliers, and transporters. They contended that stringent procedures in place during the relevant period prevented clandestine activities, emphasizing regular checks by Revenue officers with no irregularities detected.

The Departmental Representative countered by pointing out evidence of clandestine procurement of raw materials and discrepancies in bill amounts with the same serial numbers. They highlighted the banks' verification process for bill discounting, indicating genuine transactions and rejecting the appellants' defense of financial accommodation.

The Tribunal, after considering arguments from both sides, found that the appellants failed to establish a strong case in their favor for unconditional stay. Acknowledging the admitted bank discounting, the Tribunal noted discrepancies in bill amounts and evidence of unaccounted raw material procurement, leading to a decision requiring appellants to deposit 25% of confirmed duty amounts or penalty within a specified timeframe. Compliance would allow the stay of balance amounts during the appeal process.

Ultimately, all stay petitions were disposed of with the directed deposit conditions, emphasizing the need for appellants to comply within the stipulated period for further proceedings.