2018 (8) TMI 454 - AT - Central Excise

Clandestine removal - clearance of 13244 kgs of lead dross - it was alleged that the appellant had not maintained a Daily Stock Register and the clearance and value of the impugned goods were not shown in the monthly ER1 returns - Held that - The Hon ble Bombay High Court in the case of Hindalco Industries Limited Vs. Union of India 2014 (12) TMI 657 - BOMBAY HIGH COURT allowed the petition of the Assessee and held that the decision of the Larger Bench of the Tribunal in the case of Hindalco Industries Limited Vs. CCE Belapur, Mumbai 2014 (11) TMI 385 - CESTAT MUMBAI (LB) was perverse, vitiated by error of law apparent on the face of record. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Alleged evasion of payment of Central Excise duty on lead dross clearance
- Failure to maintain Daily Stock Register and report impugned goods in ER1 returns
- Confirmation of demand, interest, and penalties by adjudicating authority
- Upholding of adjudication order by Commissioner (Appeals)
- Applicability of decisions by Hon'ble Bombay High Court and Hon'ble Supreme Court

Alleged evasion of payment of Central Excise duty on lead dross clearance:
The appellant, engaged in manufacturing HTS wire, faced a show cause notice for allegedly evading payment of Central Excise duty on the clearance of lead dross sent to job workers for conversion to Lead ingot. The notice claimed evasion of &8377; 1,59,800 on 13244 kgs of lead dross manufactured from March 2014 to February 2015. The appellant failed to respond, leading to confirmation of the demand under Section 11A of the Central Excise Act, 1944, with interest and penalties imposed by the adjudicating authority.

Failure to maintain Daily Stock Register and report impugned goods in ER1 returns:
The show cause notice also highlighted the appellant's failure to maintain a Daily Stock Register and report the clearance and value of the impugned goods in the monthly ER1 returns. This non-compliance was a factor in the confirmation of the demand, imposition of interest, and penalties by the adjudicating authority, a decision upheld by the Commissioner (Appeals).

Applicability of decisions by Hon'ble Bombay High Court and Hon'ble Supreme Court:
The Tribunal considered a decision by the Hon'ble Bombay High Court in the case of Hindalco Industries Limited Vs. Union of India, where it was held that a decision by the Larger Bench of the Tribunal was erroneous. The High Court also referenced a decision by the Hon'ble Supreme Court in the case of Grasim Industries Limited, stating it as binding on the Revenue. Citing these precedents, the Tribunal found that the impugned order could not be sustained, leading to the allowance of the appeal by the appellant.

This comprehensive analysis of the judgment covers the issues of alleged duty evasion, non-compliance with record-keeping requirements, and the impact of relevant legal precedents on the final decision of the Tribunal.