2014 (5) TMI 756 - AT - Central Excise

Waiver of pre deposit - Duty demand - Clandestine removal of goods - Held that - So far as clandestine removal of 185.110 MT of MS Wire short found is concerned, it is clearly brought out by the appellants that majority of these goods were sent to the job work which on verification by the field formations was found to be true. Appellant has therefore, made out a prima facie case for waiver of this demand. Regarding demand of cenvat credit of Rs. 10,97,563/- on 50.402 MT of imported Zinc Ingots is concerned, Revenue has relied upon some of the statements recorded from the appellant s employees whose cross-examination was not provided. This fact is countered by the statement of the appellant that the inputs were received and utilised in their factory for manufacture of dutiable goods and also that the statement of transporters were not recorded. There is also no allegation that Zinc Ingots imported were found diverted to some other place or that any representative of such diverted goods were seized by the investigation. It is also difficult to appreciate as to why a manufacturer will dispose off the imported Zinc Ingots at the place of import and acquire again the same quantity of Zinc from elsewhere for use in the manufacturing activity - Prima facie, appellant has not made out a case of complete waiver of demands confirmed against them are required to be put to some conditions because the submissions made by the main appellant are required to be gone into details which can be done only at the time of final hearing of the case - Conditional stay granted.

Summary

Issues:
Stay application filed by the main appellant and other appellants for penalties imposed. Dispute over shortages of MS Wire, lead ingots, and non-receipt of imported Zinc ingots. Arguments regarding shortages and non-receipt of goods. Revenue's defense based on admissions by the appellant's employees. Decision on waiver of demands and imposition of pre-deposit conditions.

The main issue in this judgment revolves around a stay application filed by the main appellant and other appellants to stay the operation of an order-in-appeal. The dispute primarily concerns shortages of 185.110 MT of MS Wire, 2.709 MT of lead ingots, and non-receipt of 50.350 MT of imported Zinc ingots. The appellant's advocate argued that the shortages were sent to job workers and the imported Zinc ingots were received and used in manufacturing. The advocate also highlighted the lack of transporter statements and cross-examination of relevant individuals.

The Revenue, represented by an advocate, defended the order by pointing out admissions made by the appellant's security officer and excise clerk regarding the non-receipt of imported goods. The judgment, after hearing both sides and examining the case records, acknowledged the prima facie case made by the appellant regarding the shortages of MS Wire sent to job workers. However, it noted the lack of a justifiable explanation for the shortage of lead ingots. The judgment also considered the appellant's argument that the imported Zinc ingots were received and utilized in manufacturing, questioning the rationale behind disposing of imported goods and acquiring them again.

Ultimately, the judgment ordered the appellant to pre-deposit a specific amount within a stipulated period, with a stay on recoveries of the remaining amounts and penalties imposed, subject to compliance. The decision emphasized that detailed examination of the submissions would occur during the final hearing, indicating that the demands confirmed against the appellant required further scrutiny. The judgment balanced the interests of both parties by imposing pre-deposit conditions while allowing a stay on recoveries pending the final disposal of the appeals.