2017 (9) TMI 987 - AT - Central Excise

Clandestine removal - appellant case is that the impugned order has been passed without giving to the appellant copies of the relevant seized records - Held that - several incriminating documents, relating to removal of finished goods without accounting the same in the Central Excise records and removing the same without payment of duty, were recovered by the Department during search. The entries in the private documents did not tally with the statutory records maintained in the factory - The allegations of clandestine clearance have been supported by the records un-earthed by the departmental officers during investigation. The receipt of clandestinely cleared goods have also been corroborated by the recipient through various statements. The quantification of the duty demand have also been made only on the basis of private records maintained by the assessee himself. From the evidences unearthed in the present case, it is possible to arrive at the conclusion that clandestine clearances have been done by the appellant. The documents unearthed also leads to the determination of quantum of such clandestine clearance. MODVAT/CENVAT credit - input - EVA - Synthetic Resin - Held that - by way of chemical test of the samples of the final product, it was established by Department that both EVA & Synthetic Resin, were absent in the final product. The above facts have established that the claim of the appellant was fraudulent and such inputs have not been utilized in the manufacture of final product at all - reversal of credit upheld. Appeal dismissed - decided against appellant.

Summary

Issues:
Clandestine removal of goods without payment of duty, availability of relevant seized records, calculation sheets for duty demand, validity of impugned order, disallowance of modvat credit, evidences of clandestine clearance.

Analysis:
The appellant, a manufacturer of rubber products, appealed against an Order-in-Original demanding Central Excise duty for clandestinely removed goods and wrongly availed Modvat Credit. The appellant argued that the impugned order lacked relevant seized records and legible calculation details. The Department contended that all necessary documents were provided to the appellant. The Tribunal noted incriminating documents found during search, discrepancies in records, and admission of clandestine removal by a partner. Private registers corroborated unaccounted clearances. The Tribunal dismissed the appellant's argument of document non-supply, citing records of document handover and personal hearings.

The Tribunal upheld the impugned order based on incriminating documents, recipient statements, and discrepancies in records, supporting allegations of clandestine clearances. Modvat credit disallowance was justified as chemical tests revealed claimed inputs were absent in final products. The Tribunal acknowledged the challenge of proving clandestine clearances due to evidence destruction but found sufficient evidence in this case to uphold the order. The impugned order was upheld, rejecting the appeal.

In conclusion, the Tribunal upheld the impugned order, citing evidence of clandestine clearances, discrepancies in records, and fraudulent modvat credit claims. The appellant's arguments regarding document non-supply were dismissed, and the impugned order was deemed valid. The appeal was rejected, affirming the decision of the adjudicating authority.