2014 (2) TMI 818 - AT - Central Excise

Waiver of pre deposit - clandestine clearance of M.S. ingots - Imposition of equal penalty - Purchase the raw materials in the name of the Applicant No.(1) - Credit taken on purchases - Held that - Applicant No.(1) has taken the Central Excise Registration for manufacture of excisable goods. They are also furnishing various returns to the Department in respect of excisable goods manufactured from their said registered premises. CENVAT Credit was also availed by them. We also find that on 12.06.2008, the Officers of Bolpur Headquarters (Anti-Evasion) took physical stock in the factory of the Applicant No.(1) and detected shortage of 1036.427 MT of M.S. Ingots. Shri Ashok admitted the shortage and clarified that some clearances were made by them without proper accounting and accepting the duty liability of such shortage quantity, he made an advance deposit of Rs.36.00 lakh in nine post-dated cheques. In these circumstances, they cannot take a plea that the duty liability in respect of clearances without payment of duty for the impugned period, they were not liable to pay the same - Applicants could not be able to make out a prima facie case for full waiver of the predeposit of the dues adjudged - Conditional stay granted.

Summary

Issues: Duty waiver and penalty imposition on the Applicants.

Analysis:
1. Duty Waiver Request:
The Applicants sought waiver of duty amounting to Rs.1,99,31,299/- and penalties imposed on them. The duty liability was based on incriminating documents recovered during searches at factory and residential premises, indicating unaccounted receipts of raw materials and clandestine clearances of M.S. Ingots. Statements of involved parties confirmed discrepancies in production and clearance processes. The Applicants attempted to shift duty liability onto each other, but the Tribunal found them liable as the registered manufacturer of excisable goods, responsible for payment of duty on clearances. Despite attempts to evade liability, the Tribunal concluded that the Applicants failed to establish a prima facie case for full waiver of the dues adjudged.

2. Penalty Imposition:
The penalties imposed on the Applicants were Rs.5.00 lakh on one Director and Rs.20.00 lakh on another Director. The Tribunal considered the circumstances, including shortage of M.S. Ingots detected during a physical stock check and admissions of improper clearances without accounting for duty. The Directors' attempts to shift blame were noted, but the Tribunal held them accountable for their roles in the production and clearance processes. In line with legal principles and precedents, the Tribunal directed the Applicants to make predeposits of 25% of the duty amount and 10% of the penalties within a specified timeline to stay recovery of the balance dues during the appeal process.

In conclusion, the Tribunal dismissed the Applicants' plea for full waiver of duty and penalties, directing them to make specified predeposits to stay recovery proceedings. The decision was based on the Applicants' failure to establish a strong case for relief and their responsibilities as registered manufacturers of excisable goods. The judgment highlighted the importance of upholding duty payment obligations and the legal principles governing such cases, ensuring compliance with statutory requirements and revenue interests.