2017 (9) TMI 1063 - AT - Central Excise

Clandestine removal - parallel invoices issued by the appellant no.1 - demand also on the basis of batch register, RG-1 register and various statements - Held that - it is an admitted fact that the appellant had clandestinely cleared the goods worth ₹ 33,27,015/- involving the Central Excise duty of ₹ 5,32,322/-. This is also undisputed that parallel invoices were found from the records resumed from the factory and in follow-up searches at the Delhi sale depot. The fraudulent clearances on these invoices as per the table given on the preceding pages were fairly admitted by the Ld. Advocate during his oral submissions - the order of the Ld. Commissioner (Appeals) in so for as it relates to the demand of ₹ 5,32,322/- on account of these fraudulent invoices is upheld. Application for extended period for this demand is also upheld. he rest of the demand is mainly based on figures in the Batch Register and the statements of various company officials. While the appellants have pleaded that there was selective reading of the Batch Register and no finding have been given by the adjudicating authority on the statement of the chemist, I also find that the finding of the Ld. Commissioner (Appeals) on the retraction of the statements extracted below, shows that there is element of assumption and presumption while appreciating the evidence - the demand of ₹ 25,48,526/- is set aside and the matter is remanded to the adjudicating authority for de novo adjudication. Decided partly against appellant and part matter on remand.

Summary

Issues:
Fraudulent issuance of parallel invoices leading to clandestine clearance of goods without payment of Central Excise duty; Selective reading of batch registers and statements of company officials; Legal validity of documents and evidence presented; Imposition of penalties on company officials.

Analysis:
The case involved the appellants, engaged in manufacturing pesticides and fertilizers, appealing against an order pertaining to fraudulent activities discovered during a Central Excise officers' check. The officers found discrepancies in invoices, indicating clandestine clearance of goods without paying duty. The demand amounted to ?33,27,015, with ?5,32,322 as Central Excise duty. Penalties were imposed on various individuals, including the Managing Director and other officials.

The appellant's advocate argued selective reading of batch registers and lack of findings on certain statements. They cited relevant case laws to support their contentions. The appellate authority upheld the demand related to fraudulent invoices and penalties, emphasizing the admitted fraudulent clearances and the roles of involved individuals. Penalties were confirmed based on the evidence presented.

Regarding the remaining demand, based on batch registers and statements, the appellate authority found shortcomings in the adjudicating authority's analysis. The order was remanded for fresh adjudication to consider the contentions regarding selective reading of batch registers and retraction of statements, emphasizing the need for a holistic view and compliance with legal principles.

The judgment also noted the demise of the Managing Director, leading to the abatement of penalty proceedings against him. Ultimately, the demand related to parallel invoices was upheld, penalties on officials confirmed, and the remaining demand remanded for reevaluation. The judgment provided a detailed analysis of the evidence, legal arguments, and procedural aspects, ensuring a fair and comprehensive review of the case.