2017 (11) TMI 1386 - AT - Central Excise

Clandestine removal - clearance of unaccounted Ferro Alloys Silico Manganese in the guise of accounted clearance of large quantities of Manganese ore fines/waste - unaccounted loss of manganese ore not satisfactorily explained and alleged to have been used in the unaccounted manufacture of Silico Manganese - Held that - Held that - heavy reliance has been placed by the Revenue on the discrepancies in the vehicle details and nonavailability of buyers details with reference to accounted clearance of Manganese ore fines/waste. While a prima facie case can be initiated on such premise we note that duty demand on the final product requires corroborative evidence and analysis of all available evidences which should cumulatively lead to a conclusion that the goods have been manufactured and cleared clandestinely - demand withheld. Unaccounted income - Held that - The income has been satisfactorily explained and accepted by income tax authorities. This aspect requires examination and clear finding by Original Authority - Similarly, the appreciation of evidence collected from the transporters has also not been made analytically - mater requires re-examination. Appeal allowed - part matter on remand.

Summary

Issues:
- Alleged suppression of manufacture and clearance of excisable goods
- Demand of Central Excise duty and penalties
- Confirmation of duty liability and penalties by Original Authority
- Appeal against impugned order

Analysis:

The judgment pertains to two appeals challenging a common impugned order issued by the Commissioner of Central Excise, Raipur, against a company engaged in the manufacture of Ferro Alloys. The main issue revolves around the alleged suppression of manufacture and clearance of excisable goods during the period 2006-2009, leading to a demand for Central Excise duty and penalties. The Revenue contended that the appellants had short paid Central Excise duty, primarily on account of the clearance of Manganese Ore Fines/Waste and unaccounted manufacture and clearance of Silico Manganese. The Original Authority confirmed a total duty liability of &8377; 7,08,17,971 and imposed penalties on the main appellant and a director in the company.

The Original Authority based its conclusions on various grounds, including the unexplained shortage of raw materials, dubious clearances of Manganese ore fines/waste, unexplained income, and the alleged role of the director in aiding the evasion of duty. The appellants challenged the order on factual and legal grounds, arguing that there was no concrete evidence to support the allegations. They contended that the demand was based on presumptions and inference without substantial proof, and discrepancies in vehicle details were due to clerical errors.

Upon hearing both sides, the Tribunal noted that the duty demand was primarily based on discrepancies in vehicle details and unexplained income. However, it found that the analysis supporting the duty demand was lacking and required more substantial evidence. The Tribunal emphasized the need for a thorough examination of all available evidence to conclusively prove clandestine manufacture and clearance of goods.

Regarding the unaccounted income and shortage of ore, the Tribunal directed the Original Authority to re-examine these aspects with supporting evidence. It highlighted the importance of clear findings on these issues and the necessity for a detailed analysis of the evidence collected from transporters. The Tribunal also noted the appellant's claim that ore shortages were cumulative over a long period, requiring further examination with relevant evidence.

Ultimately, the Tribunal set aside the impugned order and remanded the case to the Original Authority for a fresh consideration. The appellants were granted an opportunity to present their defense with relevant documentary evidence. The appeals were allowed by way of remand, emphasizing the need for a more thorough and evidence-based assessment in the case.