2018 (3) TMI 687 - AT - Central Excise

Clandestine removal - SSI exemption - crossing of threshold limit of ₹ 1 crore - Held that - there is no evidence which indicates that the value of goods manufactured in the factory have exceeded ₹ 1 crore limit - there is no justification for allegation of clandestine manufacture and clearance made by the Revenue - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against Order-in-Original
- Duty demand exceeding SSI exemption limit
- Allegation of clandestine clearance
- Evidence presented by both parties
- Interpretation of balance sheet figures
- Director's admission and undertakings
- Certificate by Chartered Accountant
- Justification for allegation of clandestine clearance

Analysis:
The appeal was filed against Order-in-Original No.161162/2013 dated 19/11/2013, concerning a total demand of ?210946/- with penalties. The appellant, engaged in manufacturing X-Ray Machines and trading supporting items, was found to have crossed the SSI exemption limit during a search on 6/9/2010, leading to duty demand and penalties. The appellant contended that the turnover exceeding ?1 crore was only ?96,000/- for which excise duty was paid, and the balance sheet figures included traded items not subject to SSI exemption. The department lacked evidence of clandestine clearance, while the Director admitted to exceeding the limit and paying the differential duty.

The Revenue's case relied on balance sheet scrutiny, alleging clandestine clearance based on additional turnover from traded goods. The Director's vague admission and partial discharge of differential duty were noted, along with a Certificate by a Chartered Accountant listing separately manufactured and traded goods. The items traded, like Dental X-ray machines and chemicals, were not manufactured by the appellant. However, the lack of evidence showing manufactured goods exceeding the limit led to the conclusion that the Revenue's allegation of clandestine clearance lacked justification. Consequently, the impugned order was set aside due to insufficient supporting evidence, and the appeals were allowed.

In conclusion, the judgment addressed the issues of duty demand exceeding the SSI exemption limit, the allegation of clandestine clearance, evidence presented by both parties, interpretation of balance sheet figures, Director's admission, the Chartered Accountant's Certificate, and the justification for the allegation of clandestine clearance. The decision to set aside the impugned order was based on the lack of evidence supporting the Revenue's claims, highlighting the importance of concrete evidence in such cases.