2017 (9) TMI 1179 - AT - Central Excise

Clandestine removal - SSI exemption - N/N. 9/2003 dated 01.03.2003 - Held that - the appellant had followed a modus operandi of issuing double set of invoices for clearing the goods without discharge of duty liability even after reaching the exemption limit of one crore - It is not the case where on account of imposition of duty liability on otherwise exempted product, viz., corrugated boxes, the appellant had been in some confusion with respect to duty liability and for which reason the present differential duty liability has arisen - The aspect of extending cenvat credit benefit was considered and rejected with cogent reasons by the authorities below - appeal dismissed - decided against appellant.

Summary

Issues:
1. Differential duty liability on manufacture and clearance of corrugated boxes exceeding the prescribed limit under SSI Notification.
2. Imposition of penalty under various provisions of Central Excise Act, 1944.
3. Allowance of cenvat credit during the period of duty liability.
4. Allegation of clandestine removal through double invoicing.
5. Consideration of cum-duty benefit and evidence of materials received in the factory.

Analysis:
1. The case involves the appellants engaged in manufacturing corrugated boxes exceeding the prescribed limit under SSI Notification, leading to a demand for a differential duty of ?4,50,148 along with interest and penalty. The original authority and Commissioner (Appeals) upheld the proposals, prompting the appeal before the forum.

2. The appellant's representative acknowledged the duty liability but sought cenvat credit during the liable period and relief from penalty. On the contrary, the respondent alleged clandestine removal through double invoicing, supported by the firm's proprietor's admission, justifying the penalty imposition. The appellant's plea for cenvat credit was refuted due to lack of evidence of material receipt as per the show cause notice.

3. The tribunal considered both parties' arguments and found the appellant intentionally evaded duty liability by issuing duplicate invoices after surpassing the exemption limit. The appellant's conduct was supported by documentary evidence, and the authorities rejected the cenvat credit claim due to insufficient proof of material receipt at the manufacturing site. The tribunal upheld the impugned order, dismissing the appeal based on the established evasion and lack of evidence supporting the appellant's claims.

4. The judgment highlights the appellant's deliberate evasion of duty liability through deceptive practices, such as issuing duplicate invoices, despite being aware of the duty obligations. The tribunal found no confusion regarding duty liability due to the imposition on previously exempted corrugated boxes, emphasizing the intentional evasion through fraudulent means. The appellant's failure to provide evidence of material receipt further weakened their case for cenvat credit, leading to the dismissal of the appeal.

5. The tribunal's decision underscores the importance of compliance with duty obligations and the consequences of attempting to evade such responsibilities through deceptive practices. By considering the evidence presented and the appellant's conduct, the tribunal affirmed the penalty imposition and denial of cenvat credit, emphasizing the need for transparency and adherence to regulatory requirements in manufacturing and clearance processes.