2015 (10) TMI 1979 - AT - Central Excise

Waiver of pre deposit - Clandestine removal of goods - Held that - During visit of the Central Excise officers on 21/09/2005, 7 chits were found against which 85MT of cement was shown to have been cleared. Main appellant also paid the duty with respect to 85MT of Cement. It is further observed from para 5.30 of the Order-in-Original dated-10/01/2013 that certain invoices/challans issued by the main appellant were also recovered suggesting use of separate set of invoices for effecting clandestine removals. In addition to the above, Revenue has brought other corroboration on record the veracity of which has to be gone into detail which can be only done during the course of final hearing. Main appellant has not made out a prima facie case of complete waiver and is required to be put up to certain conditions. It is accordingly, ordered that main appellant should pre-deposit an amount of ₹ 20.00 Lakhs within a period of eight weeks - Partial stay granted.

Summary

Issues: Stay application for recovery of confirmed demand and penalty in a case of clandestine clearance of cement.

Analysis:
1. Cross-examination of witnesses: The main appellant and the Managing Director sought the benefit of cross-examination of witnesses during the remand proceedings. The advocate argued that while some witnesses were cross-examined, others were not, leading to a case primarily based on statements without sufficient corroboration from independent evidence.

2. Arguments by the Appellant: The advocate contended that the department did not correctly quantify the duty, hence requesting a stay against the recovery of the confirmed demand and penalty.

3. Response by the Respondent: The respondent, represented by the Superintendent, stated that all witnesses requested for cross-examination were issued summons. It was argued that the case was not solely based on statements, as there were ample corroborative evidences, including 7 chits and procurement of excess raw materials, indicating clandestine manufacturing and clearance of finished goods.

4. Adjudication and Decision: After reviewing the case records, it was found that a case of clandestine clearance of cement was established against the main appellant. The Adjudicating Authority confirmed a demand of Rs. 2,62,04,776, along with interest, and imposed a penalty on the main appellant and the Managing Director. Various pieces of evidence, such as 7 chits and separate invoices for clandestine removals, were presented. The main appellant was ordered to pre-deposit Rs. 20.00 Lakhs within eight weeks, with a stay on the remaining amounts subject to this payment. The Revenue's application for early hearing was rejected, with instructions to report compliance by a specified date.

This detailed analysis covers the issues of the stay application, cross-examination of witnesses, arguments by both parties, adjudication process, and the final decision of the Appellate Tribunal CESTAT KOLKATA regarding the recovery of confirmed demand and penalty in the case of clandestine clearance of cement.