2017 (2) TMI 772 - AT - Central Excise

Validity of impugned order passed by adjudicating Commissioner - The appeal contends that the adjudicating Commissioner had erroneously applied the finding in the finalisation of provisional assessment to the valuation of goods in the impugned order and that, instead of sample, all the invoices should have been verified. Held that - Once the foundation of the proposed enhancement in value loses validity, a fresh value using another method that was not proposed in the notice can be adopted only at peril to the correctness of the proceedings. It is well settled that adjudication orders cannot travel beyond the notice - Revenue has not adduced any evidence to support the contention that scrutiny of all invoices would have unearthed evasion of duty. That is a mere presumption and, hence, not tenable - appeal dismissed.

Summary

Issues:
Revenue's appeal against dropping of proceedings for recovery of duty, penalty imposition, and asset confiscation under Central Excise Act, 1944.

Analysis:
The case involved the Revenue appealing against the dropping of proceedings initiated for the recovery of duty, penalty imposition, and asset confiscation from a company under the Central Excise Act, 1944. The company had availed the facility of invoice-based clearance of goods, which was later withdrawn due to non-compliance with conditions. Notices were issued for recovering duty differentials for various periods. The proceedings faced challenges in the High Court, leading to the quashing of show cause notices for certain periods. The adjudicating authority found no misdeclaration of value based on the finalization of provisional assessment and discrepancies in the invoices. The appeal contended that all invoices should have been verified instead of a sample. The absence of invoices affected the proposed recovery, and adopting a new valuation method not mentioned in the notice was deemed impermissible. The Revenue failed to provide evidence supporting the contention of duty evasion through invoice scrutiny. Consequently, the appeal was dismissed as lacking merit.

This judgment highlights the importance of adhering to the notice's proposals in adjudication orders, the significance of proper evidence to support contentions, and the limitations on adopting new valuation methods beyond what was initially proposed. The decision emphasizes the need for thorough verification of all relevant documents and the consequences of deviating from the specified procedures in excise duty proceedings.