2008 (7) TMI 231 - AT - Central Excise

On the basis of discrepancies found in 4 copies of the invoices, the proceedings were initiated against the appellant alleging that they have cleared the goods twice under the cover of the same invoices - discrepancies stands duly explained by the assessee - fact of such discrepancies, cannot lead ipso facto to the conclusion that all other invoices were also used as a means of double transportation - in absence of affirmative evidence to show clandestine removal, the charges cannot be upheld

Summary

Issues:
1. Alleged double clearance of goods under the same invoices leading to short payment of duty.
2. Confirmation of duty demand based on minor discrepancies in invoices.
3. Imposition of penalties on the appellant.

Analysis:
1. The appeals, one by the Revenue and two by the assessees, were collectively addressed as they stemmed from the same impugned order by the Commissioner (Appeals). The case involved M/s. Unichem India, a manufacturer of basic chromium sulphate, where discrepancies in invoices led to allegations of double clearance of goods under the same invoices, resulting in short payment of duty. The central issue revolved around the findings during the visit by Central Excise Officers, where no physical stock discrepancies were found, but certain incriminating documents were seized, leading to duty demands totaling Rs. 5,53,745/- and Rs. 2,20,322/- along with an additional demand of Rs. 20,000/- based on a consignment note. The Commissioner (Appeals) dismissed the duty demand based on minor discrepancies in four invoices, citing lack of evidence for clandestine clearance, but upheld the Rs. 20,000/- demand and imposed penalties, which were challenged by both parties.

2. The Commissioner (Appeals) found the duty demand unjustified due to minor discrepancies in the invoices, attributing the errors to inadvertence and malfunctioning of carbon, with no proof of clandestine clearance. The appellant's explanation regarding the discrepancies was accepted, supported by affidavits from customers confirming duty payments. However, the demand of Rs. 20,000/- based on the consignment note was upheld due to the appellant's failure to provide a satisfactory explanation. The Revenue contested the dropping of duty demand, leading to the matter being further examined by the Appellate Tribunal, which upheld the Commissioner's decision, emphasizing the lack of concrete evidence supporting the allegations of double transportation of goods.

3. Upon review, the Appellate Tribunal found no fault in the Commissioner's decision to dismiss the duty demand, as the minor discrepancies were adequately explained by the appellant. The confirmation of the Rs. 20,000/- demand was accepted due to lack of explanation from the appellant, but the penalty imposed was deemed excessive and reduced to Rs. 20,000/-. The penalty on the authorized representative was set aside. Ultimately, all appeals were resolved with the confirmation of the Rs. 20,000/- demand and adjusted penalties, bringing the case to a close with the final order pronounced on 10-7-2008.