2018 (2) TMI 1023 - AT - Central Excise

Clandestine removal - unaccounted stock/clearances of excisable goods - irregular maintenance of records - penalty u/r 25/26 of CER - shortage of SS Billets - Held that - the case of clandestine removal cannot be upheld only on the basis of shortage of excisable goods it is imperative for the assessee to explain satisfactorily the non-availability of excisable goods which were produced and accounted for in their records. In the absence of satisfactorily explanation an inescapable conclusion as drawn by the lower authority regarding non-duty paid clearance of such accounted goods cannot be contested Unaccounted clearance of SS billets and flats - Held that - while noting that detailed evidence regarding actual clearance receipt of money transport details were not available in the present case it cannot be denied that evidence of unaccounted excess production has been recorded and the same could not be rebutted effectively by the appellant. Shri Desai has also accepted the production as reported by him. When such is the case the burden is on the appellant to establish that the said goods were never in existence or not clandestinely cleared - decided against appellant. Appeal allowed in part.

Summary

Issues:
Central Excise duty liability, penalties imposed on appellants, confiscation of unaccounted stock, irregular maintenance of records.

Analysis:
1. The case involved interconnected issues of Central Excise duty liability of the main appellant and penalties imposed on all the appellants. Central Excise officers visited the factory premises and found discrepancies in stock and records, leading to initiation of proceedings for demanding duty on unaccounted stock, confiscation, and penalties.

2. In Appeal Nos. E/2001/2012 and E/2002/2012, excess unaccounted stock of stainless flats and MS billets was found, leading to confiscation and imposition of penalties. The appellants contested the confiscation and penalties, citing reasons like missing production slips and minimal stock differences. The authorities upheld the confiscation and penalties based on discrepancies in stock and records.

3. The Tribunal agreed with the lower authorities on the unaccounted stock issue, noting significant quantities of unaccounted goods and lack of satisfactory explanations from the appellants. However, the redemption fine and penalties were considered excessive and were reduced to meet the ends of justice.

4. In Appeal No. E/51004/2015, duty was confirmed on unaccounted production and clearance of SS billets and flats. The appellants disputed the findings, arguing against the shortage of SS billets and unaccounted production. The Original Authority's reliance on private documents was contested.

5. The Tribunal upheld the duty demand on SS billets found short and unaccounted production and clearance. The reliance on private records was deemed credible, and the burden was on the appellants to disprove the excess production. The appeal was dismissed based on the evidence presented and the lack of concrete contrary evidence.

6. In conclusion, Appeal No. E/2001/2012 was partly allowed with reduced fines and penalties, Appeal No. E/2002/2012 was allowed, and Appeal No. E/51004/2015 was dismissed based on the findings and evidence presented in the case.