2018 (8) TMI 880 - AT - Central Excise

Investigation and demand pursuant to search/ inspection in the factory - Held that - It is deemed fit and proper to confirm the demand of ₹ 1,63,815/-. As the appellant had deposited the duty at the time of investigation on 03-04/08/1999 they are entitled to benefit of concessional penalty of 25% on the confirmed amount of ₹ 1,63,815/- which works out to ₹ 40,953/- - the Adjudicating Authority is directed to calculate the interest and to adjust the same from the excess amount is still left unadjusted out of the amount of ₹ 4,75,000/-. Appeal disposed off.

Summary

Issues:
Investigation and demand pursuant to search/inspection in the factory.

Analysis:
The case involved an investigation and demand following a search/inspection in the factory of the appellant. The appellant, engaged in manufacturing Electrical Control Panels, had certain records seized during the search, revealing discrepancies in excisable goods clearance and duty payment. The Central Excise duty amounting to &8377; 2,42,656/- was collected but not paid to the Central Government. The demand of duty was calculated based on turnover disclosed in books of accounts and a private dispatch register, resulting in a total demand of &8377; 2,96,710/-. The Show Cause Notice dated 09/01/2004 invoked extended limitation period and proposed penalties, including personal penalty on the Proprietor. The Order-in-Original confirmed the duty demand under Section 11D and Section 11A, imposed penalties, and recovered interest. The appeal before the Commissioner (Appeals) upheld the duty charges and penalties but modified the interest demand. Subsequent appeals were filed by both the appellant and Revenue before the Tribunal.

The Tribunal dismissed the Revenue's appeal regarding the penalty under Section 11D, as no such penalty was prescribed by law. However, the appellant's appeal was allowed for reconsideration of charges related to clandestine removal. The matter was remanded to the Adjudicating Authority for a reasoned order. The Adjudicating Authority, in the subsequent Order-in-Original, confirmed the duty demand under Section 11D and Section 11A, along with penalties and interest. The Commissioner (Appeals) upheld the demand under Section 11D but found the demand for the period beyond five years to be time-barred under Section 11A, directing a recalculation of duty liability. The appellant challenged the demand under Section 11A and penalty under Section 11AC in the present appeal.

During the hearing, the appellant expressed inability to contest the demand due to the factory's closure and lack of supporting documents. The appellant argued that all clearances were recorded in maintained records, and there was no unaccounted clearance. The Tribunal, after considering the contentions and facts, confirmed the demand of &8377; 1,63,815/- but granted a concessional penalty of 25% amounting to &8377; 40,953/-. The Adjudicating Authority was directed to calculate interest and adjust it from the remaining unadjusted amount. The appeal E/3835/2010 was treated as withdrawn, while the appeal E/1189/2012 challenging the demand under Section 11A and penalty under Section 11AC was allowed in part.

This comprehensive analysis outlines the legal proceedings, challenges, and decisions made throughout the case, addressing the issues related to investigation, demand, penalties, and appeals in a detailed manner.