2017 (4) TMI 845 - AT - Central Excise

Whether the appellant had crossed the SSI limit under N/N. 8/2003 dt. 01.03.2003 and had willfully suppressed production and clearance to evade payment of duty? Held that - mere balance sheet entry does not support the appellant s case in the absence of proof of documents of trading - appellant did not disclose to the Department the name of the seller from whom they procured the excisable goods, details of payment made to the buyers, proof of transit etc. - since the Department had established the prima-facie case on the basis of seized private records and investigation carried out with the buyers and the statement of the sole proprietor, the onus was on the appellant to show the substantive proof of trading in the form of documents mentioned above that the appellant failed to discharge its burden. The appellant had suppressed the production and crossed SSI exemption limit in 2005-06 - appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against Order-in-Appeal No.23/Kol.II/ST/2011 dated 24.02.2011
- Failure to obtain Central Excise Registration post-exemption limit crossing
- Allegations of clearing excisable goods without registration
- Demand confirmation, interest, and penalty imposition under Section 11AC
- Bar on demand due to limitation and absence of suppression
- Appellant's submission on manufacturing and trading activities
- Department's argument on extended period applicability
- Examination of whether SSI limit crossed and duty evasion attempted
- Lack of evidence for goods procurement from other sources
- Discrepancies in accounting figures and lack of documentation
- Failure to disclose seller details, payment proof, and transit evidence
- Prima facie case establishment by Department through seized records
- Onus on appellant to provide substantive proof of trading activities
- Finding of suppressed production and SSI limit crossing in 2005-06

Analysis:
The appeal was filed against Order-in-Appeal No.23/Kol.II/ST/2011 dated 24.02.2011, where the appellant, a manufacturer of L.T/H.T Hardware Fittings, did not obtain Central Excise Registration post-exceeding the exemption limit of ?1.00 Crore. The Department alleged that the appellant cleared excisable goods worth ?2,30,65,776 during April 2005 to March 2006. The show-cause notice led to a demand confirmation of ?21,32,334 along with interest and penalty under Section 11AC. The appellant argued that the demand was time-barred and lacked suppression. The Department contended that the extended period applied due to non-registration post-exemption limit crossing and absence of return submission. The issue revolved around whether the appellant crossed the SSI limit and willfully suppressed production to evade duty. The appellant's claim of undertaking both manufacturing and trading activities was countered by discrepancies in balance sheet figures and lack of evidence for goods procurement from other sources.

The Department established a prima facie case through seized records and investigations, shifting the burden of proof to the appellant. Despite the appellant's assertions, the lack of documentation regarding goods procurement, seller details, and payment proof weakened their case. The Commissioner (Appeals) upheld the Department's findings, citing the appellant's failure to substantiate trading activities. The appellant's inability to provide substantive proof of trading, coupled with discrepancies in accounting figures, supported the conclusion of suppressed production and SSI limit crossing in 2005-06. Consequently, the order of the Commissioner (Appeals) was upheld, and the appellant's appeal was dismissed.