2017 (11) TMI 267 - HC - Central Excise

Clandestine removal - fake invoices - Principles of natural justice - Whether the Hon ble Tribunal was justified in rejecting the appeal without considering the contention of the appellants? - non-deduction of the quantity of cement from the alleged quantity of surreptitious removal on which duty has already been paid - penalty (quantum of penalty more than duty evaded) - Held that - the appellant company was trying to evade the payment of duty by issuing the forged invoices which are being admittedly prepared by the cashier of the appellant company through a parallel set of invoice book - Admittedly, the appellant company was found committing irregularity and under the garb of parallel set of invoice book as such issuing the fake invoices, the company was trying to evade the payment of duty. There is no error in any of the orders of the authorities below, as neither there is any irregularity in calculating the demand nor any material has been placed by the learned counsel for the appellant to substantiate his submission - appeal dismissed - decided against appellant.

Summary

Issues:
1. Justification of Tribunal in rejecting the appeal without considering appellant's contentions.
2. Deduction of cement quantity from surreptitious removal for which duty was already paid.
3. Justification of Tribunal in imposing penalty higher than duty evaded.

Analysis:

Issue 1:
The case involves the appellant challenging the decision of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) for rejecting the appeal without considering the appellant's contentions. The Tribunal confirmed the decision of the Commissioner Central Excise, Allahabad. The appellant argued that the liability of duty was unjustly imposed as they had already deposited the duty. However, the authorities found the appellant guilty of issuing forged invoices to evade duty, which was admitted by the company's director. The Court upheld the Tribunal's decision, stating that the appellant failed to show any deduction as claimed and that there was no error in calculating the demand.

Issue 2:
Regarding the deduction of cement quantity from surreptitious removal, the appellant contended that the quantity of cement on which duty was already paid should have been deducted. The Commissioner (Appeals) had reduced the penalty but affirmed the duty demand. The Court noted discrepancies in stock verification, where excess stock was found unaccounted for. The appellant's plea for a different calculation of excess stock was not accepted, as the excess was admitted by the company's authorized signatory. The Court found no irregularity in calculating the demand and dismissed the appellant's appeal.

Issue 3:
The appellant also challenged the penalty imposed by the Tribunal as being higher than the duty evaded. The Commissioner (Appeals) had reduced the penalty, considering the duty already deposited by the appellant. The Court observed that the appellant was involved in evasion of duty through forged invoices, leading to the imposition of penalties. The Court upheld the Tribunal's decision to confirm the penalty imposed, as the company's actions were aimed at evading duty payments.

In conclusion, the Court dismissed the appeal filed by the appellant, affirming the decision of the CESTAT. The order passed by the CESTAT was confirmed, and the effect of the Commissioner (Appeals) order was to be implemented effectively. The judgment highlights the importance of complying with tax regulations and the consequences of attempting to evade duty through fraudulent means.