2017 (3) TMI 599 - AT - Central Excise

SSI exemption - clubbing of units - evasion of duty - clandestine removal - Held that - The plea for reversal of reduced penalty, waiver of penalty and setting aside of confiscation by the first appellate authority are not supported by any grounds of appeal that press these for our interference. Owing to this, we find that these cannot be considered to have been seriously pursued or advanced by Revenue. The amount in dispute is well below that which can be pursued by Revenue in accordance with the enhanced limits under the New Litigation Policy communicated in F. No. 390/Misc./163/2010/JC dated 17th December 2015 of Central Board of Excise and Customs. These limits were also made applicable to cases that were pending after appeal. Appeal dismissed - decided against appellant.

Summary

Issues:
- Impugned order restricting demand confirmed by original authority to normal period of limitation
- Reduction of penalties by the original authority
- Confiscation of goods and penalties imposed on various units and individuals
- Dispute regarding invoking the period of limitation by the first appellate authority
- Amount recoverable for the period prior to the confirmed six months
- Setting aside of confiscation and penalties imposed by the original authority on specific entities

Analysis:

The judgment concerns an appeal before the Appellate Tribunal CESTAT Mumbai regarding the restriction of demand confirmed by the original authority to the normal period of limitation and the reduction of penalties. The case involves two undertakings manufacturing asbestos products and two declarant units collaborating in duty evasion. The Central Excise authorities alleged that the licenced units were clearing goods through the declarant units, leading to duty recovery proceedings. The investigation revealed discrepancies in the clearance of goods and duty payments, resulting in duty liabilities and confiscation of goods. Applications under the Kar Vivad Samadhan Scheme were allowed but not continued due to non-compliance with deposit schedules. The Settlement Commission disposed of the matter, returning it to the first appellate authority.

The order-in-original confirmed duty demands and imposed penalties on the involved units. The impugned order confirmed duty liability for six months, vacated confiscation of goods, and revised penalties downwards. It acknowledged the removal of goods without duty payment but limited recovery to the confirmed period. The dispute primarily revolved around the period of limitation invoked by the first appellate authority and the recoverable amount for the period preceding the confirmed six months. The appeal also challenged the setting aside of confiscation and penalties on specific entities.

The Tribunal dismissed the appeal of the Revenue without delving into the merit of the dispute on invoking the extended period of limitation. The decision considered the differential amount to be recovered beyond what was paid by the respondents before the appeal, noting that the disputed amount fell below the limits for pursuit under the New Litigation Policy. Consequently, the appeal was dismissed based on these considerations without a detailed examination of the period of limitation dispute.

This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal, including duty liabilities, penalties, confiscation of goods, and the application of the period of limitation in the case.