2017 (5) TMI 1183 - AT - Central Excise

Short payment of Central Excise duty - un-accountal clearance of finished goods - Held that - the appellants are pleading that when the Department is considering quantification of unaccounted clearance, they should also necessarily consider the clearances as recorded, in the statutory records. There are instances where the recorded duty paid clearance is much higher than calculated production as made by the officers, based on investigation - it is clear that the lower authorities should have recorded the finding as to the claim of the appellant regarding overall re-conciliation of quantum of excisable product, giving adjustment, recorded clearances vis- -vis calculated clearances, so that the overall unaccounted clearance can be brought out properly. The fact remains that the short payment of Central Excise duty was calculated based on the private records maintained by the appellant and after comparing the same with statutory records - If the basis of short levy is comparison of private records with statutory records, the impugned order did not give any detailed finding on this aspect at all. Appeal allowed by way of remand.

Summary

Issues:
- Short payment of Central Excise duty due to un-accountal clearance of finished goods
- Failure to maintain proper records resulting in short payment of duty
- Appeal against the Original Authority's decision confirming duty demand and penalty
- Discrepancies in duty calculation based on private and statutory records
- Lack of consideration for overall re-conciliation of clearances
- Legal sustainability of reasons recorded by the Original Authority

Analysis:
1. The case involves an appeal against an order by the Commissioner (Appeals) confirming a Central Excise duty demand and penalty imposed on the appellants for short payment of duty due to un-accountal clearance of finished goods. The Central Excise officers initiated proceedings against the appellants based on discrepancies found during verification and investigation.

2. The appellant's counsel argued that due to inexperience of staff, the accounts were not properly maintained, leading to discrepancies in duty calculation. While the appellants did not contest the demand for a specific period, they raised concerns regarding the lower authorities' failure to consider overall re-conciliation of clearances based on both private and statutory records.

3. The Authorized Representative supported the findings of the lower authorities, stating that the investigation proved the appellants' failure to maintain records for all clearances of excisable goods.

4. The Member (Technical) noted that while the records were not properly maintained, the duty liability for certain periods was not contested. However, the appellants argued that the Department should consider both recorded clearances and calculated clearances when quantifying unaccounted clearance. The Member found the reasons recorded by the Original Authority to be legally unsustainable and directed a re-examination of the appellant's claim for overall re-conciliation.

5. The short payment of duty was based on a comparison of private and statutory records, with discrepancies found in both directions. The Member highlighted the need for a detailed finding on discrepancies where private records showed lesser clearance than statutory records.

6. Consequently, the appeal was allowed, and the case was remanded back to the Original Authority for a limited examination of the appellant's claim for adjustment of production and clearance data. The Original Authority was instructed to consider all evidence, including statutory records, and provide a detailed reason for any variation in duty demand based on re-conciliation. The appellant was granted an opportunity to present their case during the fresh decision-making process.