2018 (4) TMI 1025 - AT - Central Excise

Clandestine removal - shortage of finished goods and scrap - contention of appellant is that the documentary evidence submitted by them has not been considered by the first appellate authority and there is no finding on the documentary evidence produced before him - principles of natural justice - Held that - there is no finding on documents submitted by the appellants in their defence - Besides, the documentation which has been submitted before this Tribunal requires to be examined by the Commissioner (Appeals). In the SCN itself, it is mentioned that the appellants were eligible for concessional rate of duty, as the aggregate value of their clearance was well within the limit of ₹ 3 crores in the financial year 2002-03. However, the same has not been taken into account by the first appellate authority. The matter requires re-examination - appeal allowed by way of remand.

Summary

Issues:
Alleged shortages in stock of finished goods and scrap, denial of small scale exemption benefit, consideration of documentary evidence by the Commissioner (Appeals).

Analysis:
The case involved the appellant engaged in manufacturing excisable goods under Chapter 72 of the Central Excise Tariff Act, 1985, who opted for concessional duty rate under Notification No. 9/2003-CE. Central excise officers found shortages in stock during a visit, leading to a demand notice of ?2,67,198/- with penalties. Appeals were filed challenging the penalties and denial of small scale exemption benefit.

The appellant contended that they cleared goods during a period of no production, providing documentary evidence not considered by the Commissioner (Appeals). Case laws were cited to support the claim of unfair denial of exemption. On the other hand, the Revenue argued that shortages were admitted, and the SSI notification was conditional.

Upon review, the Tribunal found discrepancies in the consideration of documentary evidence and lack of findings on the same by the Commissioner (Appeals). The eligibility for small scale exemption was deemed tentative, and the aggregate value of clearances within the limit was not duly considered. Consequently, the matter was remanded for a fresh examination by the Commissioner (Appeals) to assess the documentary evidence and determine shortages and exemption eligibility in compliance with the law.

Therefore, the appeals were disposed of by way of remand for a comprehensive reconsideration of the issues, emphasizing the need for a detailed examination of the documentary evidence and a conclusive determination on the eligibility for small scale exemption.