2014 (7) TMI 438 - AT - Central Excise

Duty demand - difference in the production figures as reflected by the Appellant in their Annual Financial Accounts (Annual Statistics) for the year, 1987-88 and the figures of production shown in their monthly RT-12 Returns - Clandestine removal of goods - Penalty under Rule 173Q of the erstwhile Central Excise Rules, 1944 - Held that - Based upon the difference shown in the annual financial accounts and RG-1 register, the findings of the clandestine manufacture and removal cannot be sustained against the appellants. It is well settled law that onus to prove clandestine manufacture and clearance is upon the Revenue and required to be proved by production of sufficient evidence. There is nothing on record to show that the appellants have been indulging into excess clearances without payment of duty. The appellants have satisfactorily explained the difference between the figures as reflected in annual financial account and those entered in RG-1 for each and every item. As such we hold that confirmation of demand of duty against the appellants is not justified - there was any suppression on the part of the appellants so as to invoke the longer period of limitation. In view of the foregoing the appellant succeeds on merits as also on the point of limitation - Following decision of assessee s own previous case 2000 (7) TMI 726 - CEGAT, KOLKATA - Decided in favour of assessee.

Summary

Issues:
1. Discrepancy in production figures between Annual Financial Accounts and monthly RT-12 Returns leading to duty recovery and penalty imposition.
2. Appellant's argument based on previous Tribunal decisions favoring them.
3. Lack of contrary evidence or appeal by the Department against previous Tribunal decisions.
4. Onus of proving clandestine manufacture and clearance on the Revenue.
5. Bar on demand by limitation and absence of suppression by the appellants.

Analysis:
Issue 1: The appeal was filed against the Order-in-Original passed by the Collector of Central Excise, Bhubaneswar, regarding the discrepancy in production figures leading to duty recovery and penalty imposition. The Adjudicating Authority confirmed the demand, alleging clandestine removal of goods without duty payment. The penalty imposed was under Rule 173Q of the Central Excise Rules, 1944.

Issue 2: The Appellant's representative argued that previous Tribunal decisions, specifically Rourkela Steel Plant Vs. Commr. of Central Excise and Steel Authority of India Vs. Commr. of Central Excise, both favoring the Appellant for the same period and issue, should be considered. The argument highlighted the identical nature of facts in those cases and the present one, emphasizing that the demand should be set aside based on the explanations provided.

Issue 3: The Department's representative failed to present any contrary decision or evidence against the previous Tribunal judgments. It was acknowledged that the facts and circumstances of the cited cases were similar to the present one, indicating a lack of challenge or appeal by the Department against the favorable rulings for the Appellant.

Issue 4: The Tribunal emphasized that the onus of proving clandestine manufacture and clearance lies with the Revenue, requiring sufficient evidence. The Tribunal found that the Appellant had satisfactorily explained the differences in figures between their financial accounts and production records, leading to the conclusion that there was no basis for confirming the duty demand.

Issue 5: The Tribunal further noted that the demand was barred by limitation, as the show cause notice was issued after the financial accounts were circulated, indicating no suppression by the Appellant to warrant an extended limitation period. Consequently, the Tribunal set aside the impugned order and allowed the appeal, providing relief to the Appellant based on the merits and limitation aspects.