2018 (3) TMI 1476 - AT - Central Excise

Recovery of duty with interest and penalty - It has been alleged that the assessee cleared duty paid inputs and finished goods without excisable invoices, without payment of duty and did not reverse the amount equal to credit availed on inputs - Held that - the assessee undertook before the Adjudicating Authority to produce the documents, which they failed to do so. In such situation, the Commissioner (Appeals) should have allowed the assessee to produce the documents before the Adjudicating Authority for verification as the same documents were not before the Adjudicating Authority - the Adjudicating Authority should decide the matter afresh taking into account the points raised by the Revenue in their grounds of appeal - appeal allowed by way of remand

Summary

Issues Involved: Alleged clearance of duty paid inputs and finished goods without excisable invoices, failure to reverse credit availed on inputs, demand for recovery of Central Excise duty, imposition of penalty, availing benefit of Notification No.03/2005-CE, appeal against adjudication order, failure to produce necessary documents, value-based exemption under Notification No.08/2003-CE, remand for fresh adjudication.

Analysis:

The case involved allegations against the assessee for clearing duty paid inputs and finished goods without excisable invoices, failing to reverse the credit availed on inputs, and not furnishing proper documentary evidence in support of their contentions. A Show Cause Notice was issued demanding recovery of Central Excise duty and CENVAT Credit availed. The Adjudicating Authority confirmed the demands and imposed penalties, stating that the assessee wrongly availed the benefit of Notification No.03/2005-CE to evade duty payment.

On appeal, the Commissioner (Appeals) set aside the adjudication order, noting that the assessee had submitted the required documents. The Revenue argued that the assessee did not declare their intention to avail value-based exemption under Notification No.08/2003-CE. The grounds of appeal highlighted that the assessee failed to produce necessary documents to verify duty payment and non-availment of CENVAT credit. The Commissioner (Appeals) allegedly based the order on the assessee's assumption without proper verification.

The Tribunal observed that the assessee had undertaken to produce documents before the Adjudicating Authority, which they failed to do. The Tribunal held that the Commissioner (Appeals) should have allowed the assessee to submit the documents for verification. As the relevant documents were not before the Adjudicating Authority, the matter was remitted back for fresh adjudication, giving a reasonable opportunity of hearing to the Respondent. The appeal was allowed by way of remand, and the cross objection was disposed of accordingly.