2017 (5) TMI 940 - AT - Central Excise

Clandestine removal - demand - Held that - the first appellate authority has failed to consider the fact that the respondent has not paid the amount of duty calculated on the basis of electricity consumption as per report of Prof Batra, IIT, Kanpur and the first appellate authority has not come to a definite conclusion on the basis of evidence produced by the appellant with the case of meritable proceedings - demand needs to be set aside - appeal rejected - decided against Revenue.

Summary

Issues:
1. Confirmation of demand with interest and penalties for alleged clandestine removal of goods.
2. Multiple proceedings for the same violation.
3. Imposition of penalties under Rule 26 of Central Excise Rules, 2002.

Analysis:
1. The appeals were directed against Order-in-Appeal No.AGS(175-177)139, 140, 141/2010 and AGS (75) 15/2011. The first appellate authority set aside the order-in-original confirming demand, interest, and penalties on the main respondent and two other respondents for alleged clandestine removal of goods. The crucial point raised was regarding multiple proceedings for the same period. The Commissioner had issued a demand in 2008 based on electricity consumption, and a subsequent notice in 2009 for the same period. The first appellate authority found that the demand in the second notice was not justified unless it was proven to be for a different quantity. The penalties imposed under Rule 26 were deemed not maintainable as the demand itself did not survive, and penalties under Rule 26 were not applicable to a corporate body.

2. The Revenue sought to set aside the impugned order, arguing that the respondent had not paid the duty calculated based on electricity consumption. However, the Revenue did not assert that the demands confirmed in the order dated 25.03.2010 were not covered by the previous order dated 28.08.2009. Since the Revenue failed to show that the demands were distinct, the first appellate authority's decision to set aside the order dated 25.03.2010 was upheld. Consequently, the Revenue's appeals were found to lack merit, and the impugned order was upheld, rejecting the Revenue's appeals.

3. The impugned order was upheld, and the appeals of the Revenue were rejected. The decision was made in the absence of representation from the respondent, and the grounds of appeal by the Revenue were found to be devoid of merits. The first appellate authority's findings regarding the multiple proceedings for the same violation were upheld, and the penalties under Rule 26 were deemed inapplicable to a corporate body.