2017 (12) TMI 1248 - AT - Central Excise

Demand of duty and penalty - SCN was issued to the appellant on account of certain debit notes raised by the appellant to their dealers - Held that - SCN contained list of debit notes issued to various dealers however it does not contains the exact nature of expenses. It is not understood as to how the Commissioner has quantified the demand in absence of said data - The appellant have also not cooperated with the Commissioner in giving prompt explanation. While there was failure on the part of the appellant to proper defence of their matter, the impugned order also does not give any justification for quantification of duty - appeal allowed by way of remand for de novo decision.

Summary

Issues: Appeal against partial confirmation of duty demand and penalty imposition.

Analysis:
1. Issue of Demand of Duty: The appellant raised objections against the demand of duty based on debit notes issued to dealers for various items like catalogue, key-chains, caps, etc., along with costs of printing and recording. The appellant contested the quantification of the demand, arguing that only a portion of the total demand was confirmed as advertising and publicity expenses. The appellant sought more time to examine the debit notes for proper quantification, but the Commissioner proceeded with adjudication without granting the requested time.

2. Non-Cooperation Allegation: The Assistant Commissioner relied on the appellant's failure to cooperate fully during the proceedings, stating that despite multiple opportunities, the appellant did not effectively present their case. The non-cooperation was cited as the reason for the Commissioner proceeding with adjudication without further delay.

3. Defence and Explanation: The appellant, in response, claimed that the sheer volume of over 2000 debit notes necessitated more time for a comprehensive reply. They highlighted instances where letters were not received promptly, affecting their ability to respond effectively. The appellant also contended that the correct figure for duty demand should have been significantly lower than the amount confirmed by the Commissioner.

4. Judgment and Remand: The Tribunal noted discrepancies in the show cause notices, pointing out the lack of clarity regarding the nature of expenses in the debit notes and the absence of proper quantification by the Commissioner. While acknowledging the appellant's failure to provide a robust defense, the Tribunal found the lack of justification for the duty quantification in the impugned order. Consequently, the case was remanded back to the Commissioner for a fresh decision. The Tribunal emphasized the need for a thorough examination of the nature of debit notes before confirming any demand, directing the Commissioner to provide ample opportunity to the appellant during the process.

This detailed analysis of the judgment highlights the key arguments, counter-arguments, and the Tribunal's decision to remand the case for further review, ensuring a fair opportunity for the appellant to present their case effectively.