2018 (4) TMI 1444 - AT - Central Excise

Clandestine removal - It is the allegation of the Department that with the help of raw material, finished product (Gutka) was sold by the appellant in the grey market and finally, Department has made out a case for clandestine removal - Held that - all business entities mentioned in the Lorry Receipts are independent business entities as their assessment, registration etc. were separate - LRs which are in the name of M/s. R S Company only will have to be adjudicated for the purpose of making the duty demand from the appellants. The rest receipts cannot be added in the hands of the appellants. Adjudicating authority directed to verify all the Lorry Receipts and raise the duty demand pertaining to the Lorry Receipts in the name of M/s. R S Company only - appeal allowed by way of remand.

Summary

Issues involved: Compliance with tribunal's direction, Allegation of clandestine removal, Identification of LRs, Duty demand on LRs, Separate business entities in LRs, Adjudication based on LRs in the name of appellant.

Compliance with Tribunal's Direction: The appeal was filed against an order where the Tribunal had remanded the matter to the Adjudicating Authority with specific observations regarding the identification of LRs not accounted for in the books of the firms involved in the case. The appellant alleged that the direction was not complied with by the Commissioner in the impugned order, leading to the present appeal before the Tribunal.

Allegation of Clandestine Removal: The case involved allegations by the Department that the appellant firm engaged in the gutka and tobacco business had conducted clandestine removal of goods, specifically scented tobacco, which were sold in the grey market. The Department made a case for clandestine removal based on the transportation of scented tobacco through certain roadways, leading to duty demands and penalties.

Identification of LRs and Duty Demand: The Department alleged that all LRs, including those in different names related to the appellant firm, belonged to the appellant, justifying the duty demand raised against them. However, the Tribunal observed that each business entity mentioned in the LRs was separate, with distinct assessments and registrations, leading to the decision that only LRs in the name of the appellant firm should be considered for duty demand adjudication.

Separate Business Entities in LRs: The Tribunal noted that various names appeared on the LRs, such as M/s. R S Company, M/s. R S & Company, and M/s. R S Industries, indicating separate business entities. It was emphasized that each firm/business entity should be treated as distinct under the law, with separate assessments, registrations, and liabilities.

Adjudication Based on LRs in the Name of Appellant: After considering the facts and circumstances of the case, the Tribunal directed the Adjudicating Authority to verify all LRs and raise duty demands only pertaining to the LRs in the name of M/s. R S Company, excluding others. The decision aimed to ensure a fair adjudication process based on the specific LRs directly linked to the appellant firm.

Conclusion: The Tribunal disposed of the appeals with the directive for expeditious decision-making, emphasizing the need for quick resolution due to the age of the matter. The detailed analysis of the issues involved in the judgment highlighted the importance of compliance with tribunal directions, proper identification of relevant documents, and the legal significance of separate business entities in determining liabilities and duty demands.