2015 (2) TMI 918 - AT - Central Excise

Clandestine removal of goods - Shortage of stock - Invocation of extended period of limitation - Held that - This is a case of clandestine removal of goods. Therefore, the normal period of limitation would not be applicable. It is supported by the decision of the Hon'ble Gujarat High Court in the case of Neminath Fabrics Pvt.Ltd. (2010 (4) TMI 631 - GUJARAT HIGH COURT). It is seen from the adjudication order that the case was made out on the basis of folding report, transport documents and miscellaneous papers as mentioned in the Annexure to the show cause notice. So, the submission of the appellant that the case was made out on the basis of statement, cannot be accepted. The appellant has not countered the documents as referred in the show cause notice as well as in the adjudication order. - No merit in the appeals filed by the appellants. Accordingly, the impugned order is upheld and the appeals filed by the appellants are rejected - Decided against assessee.

Summary

Issues:
1. Clandestine clearance of processed fabrics
2. Barred by limitation - Normal period of limitation
3. Appellants' contention on demand of duty
4. Case made out on the basis of statement
5. Adjudication based on folding report, transport documents, and miscellaneous papers

Analysis:
1. The appeals in this case arose from a common order regarding the clandestine clearance of processed fabrics by M/s Shree Radhey Krishna Process on a job work basis. Central Excise Preventive Officers found discrepancies during a visit to the factory premises, leading to a show cause notice proposing a duty demand of &8377; 12,78,000.00, interest, and penalties on the appellants. The adjudicating authority confirmed the duty demand and imposed penalties on the appellants, which were upheld by the Commissioner (Appeals).

2. The main contention of the appellants was that the demand was barred by limitation as the investigation was completed on 04.12.2004, while the show cause notice was issued on 06.06.2007, exceeding the normal period of limitation. The Revenue's representative cited a Gujarat High Court decision to support the findings of the Commissioner (Appeals) regarding the limitation issue.

3. The appellants argued that the case was solely based on a statement without other supporting documents to establish the duty demand. They emphasized the delay in issuing the notice beyond the normal limitation period. However, the Tribunal noted that the case was supported by a folding report, transport documents, and miscellaneous papers mentioned in the show cause notice, contradicting the appellants' claim.

4. The Tribunal agreed with the Revenue's representative that this case involved clandestine removal of goods, exempting it from the normal limitation period. Citing the Gujarat High Court decision, the Tribunal rejected the appellants' argument that the case relied solely on a statement, emphasizing the presence of documentary evidence in the adjudication order.

5. Considering the submissions and evidence, the Tribunal found no merit in the appeals and upheld the impugned order, rejecting the appeals filed by the appellants. The decision was pronounced in court, concluding the matter regarding the duty demand and penalties imposed on the appellants.