2018 (12) TMI 247 - AT - Central Excise

Clandestine removal - MS ingots - case of appellant is that the Central Excise Department has not conducted any search recovery or even any fresh investigation in the present matter - Held that - The Order is clear that there is no other evidence falsifying the confirmed demand. No additional evidence could be produced by the appellant even before the Central Excise Department. Apparently and admittedly no Appeal has been preferred by the appellant against the Order of the Sales Tax Department, confirming the partial demand. As a result, it stands to have attained finality that the appellant have indulged into transaction of sales of their finished goods without any entry of those transactions in the account books as to the extent of the value of ₹ 39,72,275/-. Demand confirmed alongwith penalty - appeal dismissed - decided against appellant.

Issues Involved:
1. Allegations of clandestine removal of excisable goods.
2. Confirmation of Central Excise duty, interest, and penalties.
3. Appeal against the order of Commissioner (Appeals).
4. Justification of the order and imposition of penalties.
5. Finality of the Sales Tax Department's order and its impact on the Central Excise duty demand.

Issue 1: Allegations of clandestine removal of excisable goods
The case involved allegations of clandestine removal of MS ingots by the appellants, based on information gathered by the Sales Tax Department. The Central Excise Department conducted an examination of the records seized by the Sales Tax Department and alleged a clandestine removal valued at ?66,56,820. The Sales Tax Department had demanded an amount of ?8,36,761, leading to a Show Cause Notice proposing the recovery of Central Excise duty amounting to ?5,70,771, interest, and penalties. The appellant contested these allegations, arguing that the Excise Department failed to provide substantial evidence beyond relying on documents from the Sales Tax Department.

Issue 2: Confirmation of Central Excise duty, interest, and penalties
The Assistant Commissioner initially confirmed the proposal, leading to an appeal before the Commissioner (Appeals) who partially dropped the demand based on a CTO order. However, Central Excise duty amounting to ?3,27,315 along with penalties was confirmed. The appellant challenged this confirmation, claiming that relevant documents were provided to the Excise Department, and the allegations were incorrect. The appellant sought the dismissal of the demand and penalties imposed.

Issue 3: Appeal against the order of Commissioner (Appeals)
The appellant appealed before the Tribunal, arguing that the allegations were unsustainable and based on flawed adjudications by the Sales Tax Authorities. The appellant contended that the demand should be set aside as the Excise Department failed to prove the allegations adequately. The appellant highlighted discrepancies in the Sales Tax Authorities' findings and sought relief from the confirmed demand and penalties.

Issue 4: Justification of the order and imposition of penalties
The Department rebutted the appellant's arguments, emphasizing that the case was based on documents, search, seizures, and audit reports by the Sales Tax Department, alleging clandestine removal of MS ingots. The Department justified the confirmation of Central Excise duty and penalties, citing the finality of the Sales Tax Authorities' decision regarding dropped demands related to associated firms. The Department urged the dismissal of the appeal based on the upheld orders.

Issue 5: Finality of the Sales Tax Department's order and its impact on the Central Excise duty demand
The Tribunal analyzed the Sales Tax Department's order, which partially confirmed the demand related to the sale of goods by the appellant. The Sales Tax Department's decision was based on physical verification, audit reports, and account books, leading to the confirmation of unaccounted sales. The Tribunal noted that the Sales Tax Department's decision had attained finality as no appeal was filed by the appellant. Consequently, the Tribunal upheld the confirmation of Central Excise duty and penalties, finding no infirmity in the order under challenge.

This detailed analysis of the judgment addresses the issues involved comprehensively, highlighting the arguments presented by both parties and the Tribunal's decision based on the facts and legal considerations presented in the case.

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