2017 (12) TMI 142 - AT - Central Excise

Clandestine manufacture and removal - irregular availment of CENVAT credit - Held that - even though relevant invoices, ledgers, LRs explaining the alleged clearances of the goods were by other units, but erroneously considered to be their clearance, in the Annexure to the SCN, however, the adjudicating authority has not considered the same - the Appellants in their Appeal paper book enclosed these evidences in the form of invoices, LRs, ledgers, etc. claiming that it relate to the confirmation of demand of ₹ 18,11,396/-, and demonstrated their point referring to the invoice issued by one M/s 1,51,976/-, but both the authorities below have not addressed the issue by analyzing the said evidences - these ledgers, invoices, LRs need to be examined and specific finding on these evidences ought to be recorded by the adjudicating authority - appeal allowed by way of remand.

Issues:
Appeal against Order-in-Appeal No.390 to 400/2010/COMMR(A)/CMC/RAJ passed by the Commissioner (Appeals), Rajkot.

Analysis:
1. Alleged Clandestine Manufacture and Clearance of Goods:
The case involved the seizure of documents related to alleged clandestine manufacture and clearance of goods during a visit to the appellant's factory by central excise department officers. A show cause notice was issued proposing the recovery of excise duty and penalty based on the investigation findings. The appellant disputed the allegations, submitting a list of invoices against which goods were cleared by related companies. However, the Commissioner (Appeals) rejected these documents as additional evidence, citing Rule 5(1) of the Central Excise (Appeal) Rules, 2001. The appellate tribunal found that these documents were crucial for reconciling the allegations and remanded the matter to the adjudicating authority for further examination.

2. Admissibility of Evidence and CENVAT Credit:
The appellant raised concerns regarding the admissibility of computer printouts as evidence under Section 36B of the Central Excise Act, 1944, but did not press this argument during the hearing. It was noted that the appellant did not dispute the denial of CENVAT credit. The tribunal emphasized the importance of relevant invoices, ledgers, and LR documents provided by the appellant to clarify alleged clearances of goods by other units. Despite the appellant's efforts to demonstrate discrepancies in the allegations, both the adjudicating authority and the Commissioner (Appeals) failed to analyze these crucial pieces of evidence. Consequently, the tribunal set aside the order confirming the demand for excise duty and penalties, instructing a fresh examination of the evidences by the adjudicating authority for a specific finding.

3. Remand and Decision by Adjudicating Authority:
In the interest of justice, the tribunal remanded the case to the adjudicating authority for a detailed review of the invoices, ledgers, and LR documents presented by the appellant. The tribunal stressed the need for a thorough analysis of these evidences to address the discrepancies in the allegations of clandestine manufacture and clearance of goods. The order confirming the demand for excise duty and penalties was set aside, and the matter was directed to be decided afresh based on a comprehensive assessment of the provided documents.

In conclusion, the appellate tribunal's decision highlighted the significance of considering all relevant evidences in excise duty cases to ensure a fair and just adjudication process. The remand to the adjudicating authority aimed to rectify the oversight in analyzing crucial documents and to reach a well-founded decision based on a thorough examination of the facts presented by the appellant.

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