2017 (10) TMI 3 - AT - Central Excise

SSI exemption - clubbing of clearances - natural justice - non-production of required documents by appellants - Held that - it appears that both the units have no independent plant and machinery and were totally inter-dependent on each other for manufacturing its product including voltage stabilizers in complete form. M/s. Powerkon System Ltd. has no electricity connection and borrow the power from M/s. Servokon System Pvt. Ltd. but without making any payment of the bill. Labour in both the units were common. Godown was also common - the department by the impugned order has clubbed the clearance of M/s Servokon Systems Pvt. Ltd. and M/s. Powerkon Systems Pvt. Ltd. by denying the exemption as per notification. In the peculiar facts and circumstances of the case, same appears reasonable. Clandestine removal - Held that - kaccha challans were recovered. Goods were seized which were not mentioned in the stock register. In fact, there was no stock register. After making the verification and statement from the buyers and by clubbing the material the department has issued Show cause notice and demanded the duty. In the peculiar facts and circumstances of the case, same appears reasonable - demand upheld. Appeal dismissed - decided against appellant.

Summary

Issues involved:
1. Failure to provide necessary documents to the appellant.
2. Allegations of delaying proceedings by the appellant.
3. Clandestine removal of goods and duty demand.

Analysis:

Issue 1: Failure to provide necessary documents
The appellant raised concerns about not receiving necessary documents despite multiple requests, hindering their ability to present arguments. The Commissioner (Appeals) noted that some documents were provided late, leading to delays in the proceedings. The appellant's failure to cooperate with authorities and attend hearings further complicated the situation. The appellant's counsel withdrew the application for necessary documents after lengthy arguments, indicating a lack of preparedness on the appellant's part.

Issue 2: Allegations of delaying proceedings
The tribunal observed that the appellant engaged in tactics to delay the proceedings, as evidenced by the significant time gap between the original order and the appeal filing. Both parties presented conflicting views on document availability, with the department claiming to have offered available documents to the appellant, who allegedly did not collect them. The tribunal emphasized that misuse of the judicial process for delaying proceedings is unacceptable, highlighting the importance of arguing cases on merits without unnecessary delays.

Issue 3: Clandestine removal of goods and duty demand
The case involved the discovery of unaccounted goods in unauthorized locations during a visit to the appellant's premises. The investigation revealed discrepancies in stock records, shared resources between related entities, and potential attempts to circumvent exemption limits through separate entities owned by close family members. The department's decision to club clearances of both entities and demand duty was upheld by the tribunal based on the peculiar circumstances and evidence of clandestine removal of goods. The tribunal found the impugned order sustainable, dismissing the appeals filed by the appellants originating from April 1998.

In conclusion, the judgment addresses issues related to document provision, procedural delays, and clandestine activities, emphasizing the importance of cooperation, timely proceedings, and adherence to legal requirements in excise matters.