2015 (10) TMI 765 - AT - Central Excise

Waiver of pre deposit - Duty demand - Clandestine removal - Undervaluation - Denial of Cenvat credit on inputs and capital goods - Held that - When the receiver of the goods to whom the invoices are made categorically states that he has received the entire quantity and also he has not received any subsequent quantity, the documentary evidence can be said to have been corroborated by the statements recorded from the receiver and in such a situation charge of clandestine removal has to be held as established. In some invoices amount towards freight and insurance was shown as towards freight, insurance and packing. Even though amount charged was equal to the amount agreed upon, entire amount collected in this manner has been treated as amount towards packing and differential duty has been demanded. Since appellant has paid on services of installation, erection service and Cenvat credit taken is a common pool and there is no finding that inputs have not been used to provide service, appellant has made out a case for waiver. We direct the petitioner to deposit ₹ 94.5 lakhs (Rupees ninety-four lakhs and fifty thousand only) within four weeks - partial stay granted.

Issues involved:
1. Demand of Central Excise Duty with interest and penalty under Section 11AC of Central Excise Act, 1944 and Rule 15(2) of CENVAT Credit Rules.
2. Clandestine removal of goods.
3. Undervaluation of goods.
4. Denial of Cenvat credit on inputs.
5. Denial of Cenvat credit on capital goods.

Analysis:

1. Demand of Central Excise Duty, Interest, and Penalty:
The judgment addresses the demand of Central Excise Duty amounting to &8377; 1,19,69,729/- along with interest and penalty imposed under relevant sections. The specific categories of demands include clandestine removal, undervaluation, goods cleared at NIL value, denial of Cenvat credit on inputs, and denial of Cenvat credit on capital goods.

2. Clandestine Removal:
The appellant argued that the discrepancy in invoicing arose due to partial shipments and subsequent completion of orders. They claimed that a reconciliation statement demonstrated that the invoiced and subsequently supplied quantities matched. However, the respondent contended that statements from BSNL officials confirmed no discrepancy in quantities received. The tribunal concluded that when the receiver unequivocally states receiving the full quantity without any subsequent deliveries, the charge of clandestine removal is substantiated.

3. Undervaluation:
Regarding undervaluation, the appellant asserted that amounts collected under freight and insurance were erroneously treated as packing costs, leading to a duty differential. The respondent did not contest this claim, indicating merit in the appellant's submissions. Thus, prima facie, the appellant's argument regarding undervaluation was accepted.

4. Denial of Cenvat Credit on Inputs:
The denial of Cenvat credit on inputs was challenged on the grounds that the inputs were used for both manufacturing and providing services. Since there was no finding that the inputs were solely used for services, the appellant argued for a waiver, which the tribunal found valid.

5. Denial of Cenvat Credit on Capital Goods:
The appellant disputed the denial of Cenvat credit on capital goods, highlighting a discrepancy in the amount under dispute. The tribunal acknowledged the discrepancy and focused on the actual disputed amount of &8377; 3,23,566/-. The judgment directed the appellant to deposit a specific amount within a stipulated timeframe, failing which the stay granted would be dissolved, allowing the revenue to recover the liability.

In conclusion, the judgment encompassed various issues related to Central Excise Duty demands, clandestine removal, undervaluation, and denial of Cenvat credit on inputs and capital goods. The tribunal's decision reflected a detailed analysis of the arguments presented by both parties, ultimately directing the appellant to fulfill a deposit requirement to comply with the order.

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