2015 (11) TMI 508 - AT - Central Excise

Clandestine removal of goods - Unaccounted stock - Held that - Discovery of certain papers and documents during investigation revealed that the transporters have occasioned movement of goods without invoice proving the origin and destination thereof. That originated from factory of the appellant and reached to the intended party. That remained unrebutted. The abbreviations marked proved the destination of the goods(ref para 11 of the Adjudication order). Appellant failed to prove its bonafide demonstrating the transactions as accounted. - The destination where the goods were delivered comes out from paras 33 and 34. That remained uncontroverted. Paragraph 34 sufficiently proves the case of Revenue as to the removal of the goods without payment of duty. In such a factual circumstance, in absence of any evidence to show that the movement of goods were accounted, there is no scope to differ with the adjudication finding. - Procurement of M.S. scrap was also unaccounted. Use of the unaccounted scrap in manufacture of the finished goods was not rebutted. Therefore, adjudication is confirmed. - Decided against assessee.

Summary

Issues: Alleged suppression of M.S. Ingots manufactured, unaccounted scrap usage in manufacture, movement of goods without invoices, failure to prove bonafide transactions.

In the judgment by the Appellate Tribunal CESTAT CHENNAI, the appellant vehemently opposed the adjudication based on the alleged suppression of M.S. Ingots manufactured during a specific period. The appellant argued that the material used against them lacked credibility and cogency, with no evidence of clandestine removal of ingots. They contended that since duty had been paid to reduce litigation, penalties and redemption fines should not be imposed. On the other hand, the Revenue presented evidence suggesting unaccounted goods clearance, supported by corroborative evidence indicating movement of goods from origin to destination, benefiting the fraud beneficiary. The Revenue asserted that a case had been successfully made against the appellant, proving the allegations with full proof and preponderance of probability, justifying the imposition of penalties and redemption fines.

Regarding the unaccounted scrap of 8.5 MTs used in the manufacture of M.S. Ingots, the evidence, including the testimony of the General Manager, corroborated the usage of unaccounted scrap. The Tribunal heard both sides and examined the records. The discovery of papers during the investigation revealed movement of goods without invoices, originating from the appellant's factory and reaching the intended party, remaining unrebutted. The abbreviations marked on documents indicated the destination of the goods, as per the Adjudication order. The appellant failed to demonstrate the bonafide nature of the transactions as accounted, leading to confirmation of the adjudication.

The judgment highlighted specific paragraphs in the adjudication order that detailed the basis of goods movement by transporters, the destination of goods, and the unaccounted procurement and usage of M.S. scrap in manufacturing. The evidence presented by the Revenue, including the uncontroverted nature of certain paragraphs, supported the findings of removal of goods without payment of duty. In the absence of evidence showing accounted movement of goods, the Tribunal upheld the adjudication, dismissing the appeal.