2010 (7) TMI 1169 - AT - Central Excise

Summary

Issues Involved: Appeal against duty demand, reversal of CENVAT credit, penalty imposition, allegations of clandestine removal, plea of time limitation.

Duty Demand Set Aside:
The Appellate Tribunal, CESTAT Chennai, heard the appeal against the Commissioner (Appeals) order setting aside the duty demand of Rs. 81,058 on finished goods found short. The case was based on the discrepancy between physical stock and goods stock in the Annual Report of the assessee-company, a manufacturer of switches and sockets. An amount of Rs. 29,10,650 was adjusted in the books of account. The Tribunal upheld the charge of clandestine removal, stating that finished goods found short were not accounted for in clearances from the factory. The plea of time limitation was rejected, as it cannot be advanced in cases of clandestine removal.

Reversal of CENVAT Credit:
The Tribunal addressed the irregular reversal of CENVAT credit on raw materials and components found short, as well as on raw materials in intermediate goods found short. The plea for setting aside the penalty was not accepted, as the charge of clandestine removal was upheld. The Tribunal referred to a previous decision holding that a mismatch in the value of clearances in the balance sheet and Central Excise returns is indicative of clandestine clearance, thus allowing the appeal of the Revenue.

Conclusion:
In conclusion, the Appellate Tribunal, CESTAT Chennai, set aside the duty demand on finished goods found short, upheld the charge of clandestine removal, and allowed the appeal of the Revenue based on the mismatch in clearances as per the balance sheet and Central Excise returns.