2018 (5) TMI 1204 - AT - Central Excise

Valuation - it appeared that the appellant had failed to discharge excise duty on the goods manufactured and cleared during the period March 2011 to July 2012 - Held that - Since there is a dispute with regard to the material fact as to when the goods were returned to the appellant. This material fact can only be resolved if the matter is remanded back to the original authority to verify this material fact as to whether the goods were returned in the same month as claimed by the assessee or returned back in the different months as noted by the Commissioner(Appeals) - appeal allowed by way of remand.

Summary

Issues Involved:
- Discharge of excise duty on goods manufactured and cleared
- Failure to pay excise duty on goods manufactured and cleared during a specific period
- Rejection of appeal by Commissioner(Appeals)
- Discrepancy in the timing of goods return as claimed by the appellant and observed by the Commissioner(Appeals)
- Applicability of Notification No. 31/2011-CE and Rule 16 of the Central Excise Rules, 2002
- Allegations of suppression of facts and misdeclaration
- Barred by limitation due to lack of intention to evade duty

Analysis:

1. Discharge of Excise Duty: The case involved manufacturers of readymade garments who allegedly failed to discharge excise duty on goods manufactured and cleared during a specific period. The audit revealed discrepancies where duty payable was reduced due to credit notes issued for returned goods, leading to a show-cause notice for demanding excise duty and penalties.

2. Rejection of Appeal: The Commissioner(Appeals) rejected the appellant's appeal, prompting the present appeal. The appellant argued that the impugned order failed to consider important factual and legal aspects, particularly regarding the return of goods certified by a Chartered Accountant.

3. Discrepancy in Goods Return: The appellant claimed goods were returned in the same month, contrary to the Commissioner(Appeals)' observation that goods were returned in different months. The Tribunal found a material dispute on this fact, necessitating a remand to the original authority for verification and resolution.

4. Applicability of Notifications and Rules: The appellant contended that certain notifications and rules were not violated, emphasizing revenue neutrality as duty on returned goods was paid upon clearance in the subsequent month. The Tribunal directed the original authority to examine the alleged violations and record findings on the applicability of Notification No. 31/2011-CE and Rule 16 of the Central Excise Rules, 2002.

5. Suppression of Facts and Misdeclaration: The appellant argued that there was no provision in the ER1 return to declare goods return or credit notes, hence no suppression or misdeclaration occurred. The Tribunal highlighted the need for a thorough examination of the evidence to determine the accuracy of the appellant's claims.

6. Limitation and Intention to Evade Duty: The appellant asserted that the demand was time-barred due to the absence of intent to evade duty or suppress facts. The Tribunal remanded the case to the original authority to address all issues raised by the appellant, including the limitation aspect, for a fresh determination.

This detailed analysis of the judgment outlines the key issues, arguments presented by both parties, and the Tribunal's decision to remand the case for further examination and a fresh order.