2014 (1) TMI 1385 - HC - Central Excise

Penalty u/s 11AC - Clandestine removal of goods - Held that - the Commissioner (Appeals) had confirmed addition to the extent of 14.555 MT of G.M. Balls and the Tribunal has also affirmed the finding of fact that the respondent-assessee was able to satisfactorily explain from the records maintained in respect of 45.594 MTs and it is admittedly a finding of the fact that even the revenue has not challenged that the evidence produced by the respondent-assessee is fabricated or false and when the said finding has not even been challenged before the Tribunal, then admittedly the respondent-assessee was able to prove his case and found favour with the two appellate authorities. - Decided against Revenue.

Summary

Issues:
Customs and Excise Appeal against Tribunal's order on shortage of goods, clandestine removal, confiscation, duty, and penalty reduction.

Analysis:
The case involved a Customs and Excise Appeal challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal regarding shortage of goods, clandestine removal, confiscation, duty, and penalty reduction. The Joint Commissioner, based on a survey, found shortages in goods during physical verifications and alleged clandestine removal and non-entry of stock in the register to avoid excise duty payment. Consequently, 60 MT of G.M. Balls were confiscated, with an option for redemption. The Assessing Officer confirmed excise duty and imposed a penalty. The Commissioner (Appeals) partially accepted the respondent's claim, setting aside confiscation and reducing duty and penalty substantially after analyzing the evidence.

The revenue, dissatisfied with the Commissioner's decision, appealed to the Tribunal. The respondent did not dispute the shortage of goods. The Tribunal, after thorough analysis, dismissed the revenue's appeal, upholding the Commissioner's order. The revenue contended that the Tribunal's decision was unjustified, alleging discrepancies and lack of proper explanation by the respondent. They argued that a substantial legal question arose from the Tribunal's order.

Upon review, the High Court found that the Commissioner, after examining the records and the RG-1 register, concluded that the respondent satisfactorily explained 45.594 MT of G.M. Balls but failed to substantiate 14.555 MT of the shortage. The Court noted that the revenue did not challenge the authenticity of the evidence provided by the respondent. The Court emphasized that both the Commissioner and the Tribunal had concurred on the factual findings, which were based on evidence and not challenged as fabricated. Therefore, the Court deemed it a pure finding of fact.

The High Court determined that the Tribunal's decision was based on evidence evaluation, with no legal issues arising. It found no illegality or perversity in the Tribunal's findings, considering them as factual determinations. Consequently, the High Court dismissed the appeal, stating it lacked merit.