2017 (8) TMI 699 - AT - Central Excise

Claiming concessional rate of duty - N/N. 4/97-CE dated 1.3.1997 - manufacturing of paper - It appeared to the department that the actual weight of pulp of materials other than excluded category was below the percentage stipulated - Held that - No doubt, the related SCN did invoke the entire demand on the ground of manipulation of records and there remains suppression of facts. However, in the previous Order of this Tribunal dated 24.5.2007, it has been held that findings of manipulation of records by the appellants is unwarranted in this case. This finding of the Tribunal has not been challenged by Revenue. Hence, in the denovo adjudication, the adjudicating authority cannot once again fall back on the very same allegation of manipulation of records to justify invocation of extended period - appeal allowed - decided in favor of appellant.

Summary

Issues:
Manufacturers claiming concessional duty rate under Notification No.4/97-CE; Allegations of manipulation of records and composition of pulp; Differential duty demand and penalty imposed; Invocation of extended period of limitation; Appellant's challenge on the differential duty demand and penalty.

Analysis:

1. The case involved manufacturers claiming a concessional duty rate under Notification No.4/97-CE for their printing and writing paper. The department alleged that the paper manufactured did not meet the requirement of containing at least 75% by weight of pulp from specified materials. The initial adjudication resulted in a demand for differential duty along with interest. On appeal to the Tribunal, the issue was remanded for further examination of the eligibility for the benefit of the notification.

2. The Tribunal, in its earlier order, highlighted the importance of considering paper waste (broke) captively consumed as pulp in determining the correct composition of pulp. It also noted the lack of convincing evidence of record manipulation by the appellants. The Tribunal directed the Commissioner to re-examine the eligibility of the appellants for the benefit of the notification, emphasizing the need for an effective opportunity for the appellants to be heard.

3. In the subsequent denovo adjudication, the differential duty demand was reduced significantly, and a penalty was imposed on the appellant. The appellant challenged this decision, arguing that the adjudicating authority failed to consider the use of brokes in certain entries and that the demand was hit by limitation due to no suppression of facts justifying the extended period.

4. The Tribunal, upon hearing both sides, found that the remaining differential duty demand was based on the allegation of record manipulation and suppression of facts. However, the Tribunal reiterated its earlier finding that manipulation of records by the appellants was unwarranted. As the Revenue did not challenge this finding, the Tribunal held that the extended period could not be invoked again based on the same allegation. Consequently, the demand for differential duty and the penalty imposed were set aside.

5. The Tribunal allowed the appeal with consequential relief, emphasizing the importance of adhering to the findings of the previous order and ensuring that allegations are substantiated with concrete evidence before imposing penalties or invoking extended periods of limitation.