2018 (10) TMI 1463 - AT - Central Excise

Clandestine removal - it was alleged that appellants were clearing the excisable goods without issuing invoices as required under Rule 11 of Central Excise Rules, 2002 as found from Special Audit carried out u/s 14AA of Central Excise Act, 1944 - case of appellant is that the Principal Commissioner has not considered the documents produced by the appellants and has passed the Order merely based on assumptions and conjectures. Demand on the goods as that of MS angle, MS beam, etc. used by the appellant for construction of civil structure foundation - Held that - It being an apparent fact that these goods were removed after being dismantled i.e. they were not treated as generated during the course of manufacture. It is appellants case that no cenvat credit was also availed on these goods. Department could not have proved otherwise. It becomes clear that note 8(a) of Section XV of Central Excise Tariff is not relevant to such operations and such items are not liable to duty even in accordance of Section 2(f) and Section 3 of the Central Excise Act, 1944 - demand set aside. CENVAT Credit - goods sent and received by the appellant to/for job-work - want of evidence for the goods to have been received back/ sent back within 180 days of re-sending / receiving them for the job-work - Held that - With respect to the goods received by the appellant from principal manufacturers for job-work, Notification No. 214/86 comes to the appellant s rescue by virtue of which he is not liable for payment of duty on the job- worked goods. Otherwise also, the CA certificate is simultaneously certifying the factum of sending/ receiving goods on/for job-work within 180 days thereof - these documents are sufficient to hold that the demand has wrongly been confirmed by the authority below and thus is liable to be set aside. Capital goods imported under EPCG Licences which were sent out for repairs to JSPL, Raigarh on returnable basis - demand confirmed for want of evidence of receiving the imported capital goods after repair and of non availment of cenvat credit on the said goods - Held that - Perusal of record shows that challan for clearance of goods and EPCG license are enclosed herewith alongwith the already discussed CA certificate. Non appreciation of these documents on part of the Adjudicating Authority below is highly unappreciable. The documents once looked into, entitles the appellant as being free from the alleged liability. The demand is therefore set aside. Goods returned to the suppliers due to discrepancy or defect without availing cenvat credit - demand has been confirmed for want of any evidence - Held that - The goods for which demand has been confirmed though were cleared on the gate passes but there is ample evidence on record to show that these goods were not manufactured by the appellant and were such on which appellant had not availed any cenvat credit - Confirmation of demand is therefore opined unsustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand for Central Excise duty on goods cleared without proper invoices. Allegation of clandestine removal. Confirmation of demand for certain clearances.

Analysis:
The judgment involves an appeal against a demand for Central Excise duty on goods cleared without proper invoices. The appellants, engaged in manufacturing excisable goods, were alleged to have cleared goods without issuing required invoices, leading to a demand of ?2,31,77,659. The dispute arose from the use of internal gate pass documents instead of commercial or excise invoices for clearance. The Show Cause Notices proposed demands for the period from June 2011 to June 2016, including interest and penalties. The Order under challenge confirmed a demand of ?1,79,67,683. The appellant contended that the demand was based on assumptions and lacked positive evidence, citing legal precedents to support their argument.

The Tribunal heard arguments from both sides. The appellant argued that the demand was unsustainable as there was no evidence that the goods cleared under gate pass cum challan were liable to Central Excise duty or that cenvat credit was availed. They emphasized the Department's failure to prove the appellant's cenvat credit availing. The appellant relied on legal authorities to support their position.

The Department rebutted, stating that the Principal Commissioner had detailed discussions on the goods cleared, and the confirmed demand was justified. The Tribunal, after reviewing the records, identified various categories of goods cleared by the appellants and the key question of whether these goods were excisable and eligible for cenvat credit. Part of the demand was dropped, and the confirmed demand was upheld.

Regarding the confirmed demand, the Tribunal analyzed specific categories of goods, such as MS angles used for construction, goods sent for job-work, and capital goods sent for repairs. For each category, the Tribunal assessed the evidence presented, including CA certificates and documents, to determine the liability for Central Excise duty. The Tribunal found that the demand on certain goods was not sustainable due to lack of evidence or failure to discharge the onus of proof by the Department. Consequently, the Order under challenge was set aside, and the appeal was allowed.

Overall, the judgment delves into the complexities of excise duty demands, evidence requirements, and the burden of proof in excise matters. The Tribunal's detailed analysis of each category of goods and the legal principles applied underscore the importance of substantiating claims and allegations in excise duty disputes.