2018 (3) TMI 58 - AT - Central Excise

Short payment of duty - Whether for calculation of excise duty on the amounts of sales appearing on the credit side of the balance sheet/books of accounts, is to be adjusted with the amount of excise duty shown on the debit side for the calculation of liability of excise duty for the period of assessment under the Central Excise Act read with the Rules and whether duty of ₹ 12,85,084/- is short paid? Whether the appellant have short paid Excise Duty of ₹ 62,652/- during the period from 2000-01 and 2001-02? Held that - the appellant have provided a plausible and correct conciliation as regards the amount of ₹ 12,85,084/- - it is evident from the reconciliation that the appellant have shown correctly the clearance value in their returns, as is evident from Annexure-B to the SCN, at ₹ 4,55,87,015/-. Whereas the clearance value as per the reconciliation is coming at ₹ 4,53,65,172/-. Thus, the appellant have shown correct value of clearance in their excise returns, which does not call for an adverse inference. There is no error and/or mistake has been pointed out in the calculation submitted by the appellant as per the invoice(s). Appeal allowed - decided in favor of appellant.

Summary

Issues:
(i) Calculation of excise duty on sales amounts from balance sheet
(ii) Allegation of short payment of excise duty during specific periods

Analysis:
1. The appellant, engaged in trading and manufacturing D.G. sets, faced allegations of discrepancies in sales values and duty payments during 1999-2002. Central Excise Officers found a difference in turnover, leading to a claim of short payment of duty amounting to ?12,85,084. Additionally, allegations of short payment of duty totaling ?62,650 for 2000-01 and 2001-02 were made.

2. In the previous round, the Tribunal directed a detailed examination of the appellant's trading and manufacturing activities. The Tribunal highlighted the importance of verifying the existence of these activities to ensure fair application of the law.

3. Regarding the specific issue of short payment of duty, the Tribunal noted discrepancies in the figures presented by the Revenue and the appellant. The Tribunal directed the Adjudicating Authority to allow the appellant to reconcile the figures between profit and loss accounts and excise invoices to ensure accuracy.

4. In response, the appellant submitted detailed reconciliations between sales values in profit and loss accounts and assessable values disclosed in returns. The appellant argued that the assessable value as per invoices was higher, indicating no short payment of duty amounting to ?12,85,084.

5. The appellant also contested the allegation of short payment of duty for 2000-01 and 2001-02, providing audited profit and loss accounts and a Chartered Accountant Certificate to support their claims. The appellant maintained that no short payment occurred based on the figures submitted.

6. The Commissioner, however, concluded that the appellant failed to provide sufficient evidence to support their claims, leading to the imposition of duty and penalties. The Commissioner highlighted discrepancies in the invoice details provided by the appellant.

7. Upon review, the Tribunal found the appellant's reconciliations to be accurate and plausible. The Tribunal accepted the appellant's calculations and reconciliations, setting aside the demands of ?12,85,084 and ?62,650. The penalties were also revoked, granting the appellant consequential benefits as per the law.