2016 (4) TMI 972 - AT - Central Excise

Leviability of duty - Unaccounted goods found - Clearance of goods supported by invoices but not appearing in statutory record - lapse by the appellant to record the clearance - appears to be for preventable reason in absence of any enquiry and contrary evidence discarding absence of Excise Clerk came to record - Held that - Revenue did not interrogate the Excise Clerk to find the truth. Had there been examination of the Excise Clerk, there would have been scope to discard the preliminary evidence of the appellant recorded in the course of investigation. But that was not done. Therefore, appellant s deposition became truthful without any evidence on record showing his premeditated design to cause evasion of duty. Accordingly there shall be no levy of duty at all when the appellant says that against both the allegations duty has already been paid. For no intention to cause evasion, confiscation is unwarranted. Accordingly, there shall be no redemption fine also. Imposition of penalty - Held that - there was unaccounting of the transactions for preventable reasons. Preliminary statement recorded from the appellant when discloses unassailable conduct of the appellant, there should be no penalty at all. - Decided in favour of appellant

Summary

Issues: Allegation of unaccounted goods clearance and unmachined rough carbon steel castings, duty liability, confiscation, redemption fine, penalty

Allegation of Unaccounted Goods Clearance:
The judgment dealt with the discovery of unaccounted goods clearance during a physical verification resulting in duty elements of specific amounts. The appellant argued no evidence supported the allegations of suppression or clearance without invoices, attributing the lapse to the absence of the Excise Clerk. The investigation did not find any intentional evasion of duty, as the goods had accompanying duty paying documents. The appellant discharged the tax liability, negating the need for duty levy, confiscation, or redemption fine. The Revenue contended that the appellant failed to account for transactions, justifying adjudication consequences.

Unmachined Rough Carbon Steel Castings:
Regarding the discovery of unmachined rough carbon steel castings, the appellant explained that the goods were manufactured from accounted raw materials, with no discrepancy found in the raw material record. The absence of entry in statutory records was due to the Excise Clerk's temporary absence, not an intentional evasion. The appellant argued against duty liability, confiscation, redemption fine, or penalties based on these grounds.

Analysis and Decision:
The Adjudication Authority's evidence recording was deemed fair, with the appellant's cooperation and truthful deposition noted. The appellant's explanation for the unaccounted goods clearance was accepted, attributing the lapse to the preventable absence of the Excise Clerk. The failure to interrogate the Excise Clerk led to a lack of contrary evidence, supporting the appellant's claim of no intention to evade duty. Consequently, no duty levy was imposed, as the appellant had already paid the duty. Confiscation and redemption fine were deemed unwarranted due to the absence of evasion intent.

Penalty Consideration:
The judgment concluded that the unaccounted transactions were due to preventable reasons, and the appellant's conduct during the investigation did not warrant penalties. The appellant's statement was considered truthful, leading to the decision of no penalty imposition based on the circumstances.

Final Decision:
The appeal of the firm was allowed, with no duty levy, confiscation, redemption fine, or penalties imposed. The judgment clarified that the decision was specific to the case and did not set a precedent. Additionally, the partner's appeal was also allowed, ensuring no penalty on the partner in alignment with the main appellant's success.