2012 (6) TMI 729 - AT - Central Excise

Duty demand - Invocation of extended period of limitation - Whether or not the appellant has manufactured and cleared the disputed caps and bags under the brand name Reebok and Nike to M/s. Sierra Industrial Enterprises (P) Ltd. and M/s. Reebok India Ltd - Held that - If the appellant was a trader he could easily have produced in evidence the person from whom he procured these bags and caps. The appellant, however, has failed to produce any evidence to prove his claim that he was a trader only. From the record it is evident that the appellant was evasive and non-cooperative during the adjudication proceedings. He did even produce any evidence to substantiate his claim before the appellate authority. Not only this the appellant did not even produce his account books as also the supply contract with M/s. Sierra Industrial Enterprises (P) Ltd. and M/s. Reebok India Ltd. which could has thrown light on the issue and instead took a plea that his account books have been lost regarding which a FIR was lodged with the police. From this it is evident, that FIR was lodged on an afterthought to justify, non-production of account books which would have brought true facts to light. Thus much importance cannot be attached to the FIR. From the above it is evident that the appellant has failed to adduce evidence, within his knowledge and control, to support his claim. Since, the appellant failed to lead the best evidence, in our considered view the Adjudicating Authority as also the Appellate Authority were right in drawing an adverse inference that he was the manufacturer of the caps and bags. Thus, the impugned order cannot be faulted - appellant did not get himself registered with the excise department as a manufacturer, therefore, the department could not have any way to know about the removal of excisable goods by the appellant without the payment of excise duty. Thus, in our view this is a clear case of deliberate concealment and suppression of fact on the part of the appellant as such the department was well within its rights to invoke extended period of limitation - Decided against assessee.

Issues:
1. Duty demand against the appellant reduced by Commissioner (Appeals)
2. Whether the appellant was liable to pay excise duty
3. Appeal against the order of Jurisdictional Adjudicating Authority
4. Reduction of penalty by Commissioner (Appeals)
5. Second appeal before the Tribunal
6. Whether the appellant manufactured and cleared goods without paying excise duty
7. Appellant's failure to produce evidence
8. Concealment and suppression of facts by the appellant
9. Extended period of limitation invoked by the department
10. Adverse inference drawn against the appellant
11. Merit of the appellant's plea regarding limitation

Analysis:

1. The appeal was against the Commissioner (Appeals) order reducing the duty demand against the appellant to Rs. 6,07,550 along with interest and an equal amount of penalty. The appellant contested the show cause notice, claiming to be only a trader and not liable to pay excise duty.

2. The main issue was whether the appellant was indeed liable to pay excise duty. The appellant failed to provide evidence identifying the manufacturers of the goods he supplied. The Tribunal found that the appellant was evasive and non-cooperative, failing to produce account books or supply contracts, leading to an adverse inference that he was the manufacturer.

3. The appellant's appeal against the Jurisdictional Adjudicating Authority's order was dismissed on merits by the Commissioner (Appeals), who, however, reduced the penalty imposed.

4. The Tribunal considered the reduction of penalty by the Commissioner (Appeals) but ultimately dismissed the appellant's appeal, upholding the duty demand.

5. Following a second appeal before the Tribunal, the matter was remanded back to the Commissioner (Appeals) for a fresh decision after affording the appellant a reasonable opportunity to be heard.

6. The crucial issue was whether the appellant manufactured and cleared goods without paying excise duty. The Tribunal found that the appellant failed to provide evidence supporting his claim of being only a trader, leading to the conclusion that he was the manufacturer.

7. The appellant's failure to produce crucial evidence, such as account books and supply contracts, worked against his case. The Tribunal noted that the appellant's actions raised suspicions regarding his role in the manufacturing and clearance of goods.

8. The department argued that the appellant's actions amounted to concealment and suppression of facts, justifying the invocation of the extended period of limitation under the Central Excise Act.

9. The Tribunal agreed with the department's position on the extended period of limitation, considering the appellant's failure to register as a manufacturer and the deliberate concealment of excisable goods removal.

10. An adverse inference was drawn against the appellant due to his failure to provide essential evidence, leading to the confirmation of duty demand and penalty by the authorities.

11. The Tribunal rejected the appellant's argument regarding the limitation period, finding that the show cause notice was not barred by limitation due to the deliberate concealment and suppression of facts by the appellant.

In conclusion, the Tribunal dismissed the appeal, upholding the duty demand and penalty against the appellant based on the findings of concealment, suppression of facts, and the appellant's failure to provide essential evidence supporting his defense.

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