2016 (10) TMI 821 - AT - Central Excise

Clandestine removal of goods - non inclusion of packing charges in the value - non-payment of duty in respect of goods cleared by declaring value as NIL - wrong availment of CENVAT Credit to the tune of in respect of goods meant for installation & commissioning - removal of capital goods in contravention of CENVAT Credit Rules, 2004 - clearing certain goods under a document to whom so ever it may concern and Delivery Note (Way Bill) mentioning the purpose as testing , without mentioning any value or by mentioning very low values, without raising Central Excise Invoice and without payment of Central Excise duty - Held that - we find merit in the contentions of the learned counsel that the adjudicating authority has not taken full cognizance of the submissions and documents produced by them. In the circumstances, we are of the considered Opinion that the matter requires to be considered de novo by original authority after giving an opportunity to the appellant to submit all documents and materials in their defence, which should be properly analysed and correlated to arrive at well reasoned findings with regard to the veracity or otherwise of the contentions of the appellant. All the issues are kept open - Appeal allowed - matter remanded.

Issues:
1. Alleged clandestine removal of goods without payment of duty.
2. Short payment of duty on packing charges.
3. Non-payment of duty on goods cleared with declared value as 'NIL'.
4. Wrong availment of CENVAT Credit.
5. Removal of capital goods in contravention of CENVAT Credit Rules.
6. Fabrication of documents.

Analysis:

Issue 1 - Alleged Clandestine Removal of Goods:
The appellants were accused of clearing goods under 'to whom so ever it may concern' documents for testing purposes without raising invoices or paying excise duty. The Department alleged non-payment of duty amounting to ?94,57,417 and other violations. The Show Cause Notice highlighted various discrepancies in the records, including the lack of proper inventory maintenance and non-tallying stock statements. The adjudicating authority confirmed the allegations, leading to the appeal.

Issue 2 - Short Payment of Duty on Packing Charges:
The Department demanded duty on account of non-inclusion of packing charges in the assessable value. The appellant argued that the charges collected were only for freight and insurance, not liable to be included. They contended that even if packaging costs were to be included, the entire amount collected under freight and insurance should not be added to the assessable value.

Issue 3 - Non-Payment of Duty on Goods with Declared NIL Value:
The Department alleged non-payment of duty amounting to ?38,902 on goods cleared with declared value as 'NIL'. The appellant provided explanations regarding the battery backups, indicating that the duty was already discharged at the time of initial dispatch, hence no additional duty was payable.

Issue 4 - Wrong Availment of CENVAT Credit:
The appellant disputed the denial of CENVAT credit, arguing that the goods in question were part of the Bill of Quantities on which excise duty was paid. They contended that even if the goods were for installation and commissioning, credit should be allowed as proper service tax was paid on related charges.

Issue 5 - Removal of Capital Goods Contravening CENVAT Credit Rules:
Regarding the demand for CENVAT credit on capital goods removed, the appellant acknowledged the demand but disputed the imposition of penalties, stating that they had paid the demanded amount with interest. They argued that since it was an inter-unit removal, there was no intent to evade credit reversal, hence penalties were not justified.

Issue 6 - Fabrication of Documents:
The Tribunal found merit in the appellant's argument that the adjudicating authority did not fully consider their submissions and documents. The Tribunal ordered a de novo consideration of the case by the original authority, allowing the appellant to present all relevant materials for a well-reasoned decision. The appeal was allowed by way of remand.

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