2017 (2) TMI 95 - AT - Central Excise

Mis-declaration - whether the Appellant had given false price declarations to M/s Sonal Prints under his signature as found by the Commissioner and thereby aided the said processor in evading excise duty by undervaluing processed man-made fabrics? Held that - the Revenue has miserably failed to discharge its burden of proving appellants involvement in the offence of duty evasion - impugned order set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confirmation of demand for differential duty against a textile processor.
2. Imposition of penalty under Central Excise Rules for aiding in evading excise duty.
3. Allegation of submitting false price declarations to evade excise duty.
4. Dispute regarding the signing of price declarations by the appellant or his representative.
5. Lack of authorization evidence for the signatory of the price declarations.
6. Reliance on appellant's statement and the need for independent evidence for guilt.
7. Responsibility of determining assessable value and duty liability of the manufacturer.
8. Failure of the Revenue to prove appellant's involvement in duty evasion.

Analysis:
1. The judgment pertains to an appeal against an Order in Original confirming a demand for differential duty against a textile processor due to undervaluation of processed fabrics. The Commissioner imposed a penalty under Central Excise Rules for aiding in evading excise duty through false price declarations.

2. The key issue revolves around the allegation that the appellant submitted false price declarations to aid in evading excise duty. The Commissioner confirmed the duty liability against the textile processor and imposed a penalty on the appellant for his alleged involvement in the evasion scheme.

3. The dispute primarily focuses on whether the appellant or his representative signed the price declarations under scrutiny. The Commissioner's findings were challenged by the appellant, arguing that the declarations were not signed by him or his authorized representative, thus questioning the basis of the penalty imposed.

4. The lack of evidence regarding the authorization of the signatory on the price declarations raises doubts about the appellant's involvement in the evasion scheme. The absence of proper identification or designation on the declarations casts uncertainty on the validity of the allegations against the appellant.

5. The judgment emphasizes the importance of independent evidence to establish guilt in cases of duty evasion. The appellant's statement, which was later retracted, lacked corroboration and raised doubts about the reliability of the admission made during the investigation.

6. The responsibility for determining the correct assessable value and duty liability lies with the manufacturer registered with the Central Excise department. The Revenue's failure to establish the appellant's direct involvement in the evasion scheme, especially considering the procedural discrepancies, weakens the case against the appellant.

7. Ultimately, the judgment highlights the Revenue's failure to provide substantial evidence linking the appellant to the duty evasion. The lack of proper investigation, absence of authorization evidence for the signatory, and reliance on a disputed statement without independent corroboration led to the appeal being allowed, setting aside the impugned order.